On Tuesday morning, MGM Resorts International issued $675 million in new debt, due in 2029. The new notes retire others with an earlier maturity and an interest rate of 5.75 percent.

According to an official MGM statement, “Pending such use, the company may invest the net proceeds in short-term interest-bearing accounts, securities, or similar investments.” The notes are unsecured, but guaranteed by MGM’s domestic subsidiaries.

MGM stock fell on the news. It opened at $37.59 before dropping to $36.37 per share.

Fitch Ratings, however, was sanguine, leaving its rating of MGM debt (BB- and “Stable”) unchanged. It cited the like-for-like nature of the transaction and MGM’s new ability to extend the maturities of its bonds.

Cash-flow leverage for the new debt was estimated at 2.8 times. Fitch analysts said the leverage was commensurate with the company’s bond rating, its conservative financial policy, and its “robust” amount of liquidity.

“It also considers the company’s scale, strong competitive position, and diversification in its Las Vegas and regional markets,” Fitch continued. “The continued rebound in Macau for both MGM properties [there] should support further near-term growth.”

The analysts allowed that the positive outlook for MGM was tempered by a number of factors. These included volatile high-end play in Las Vegas and Macau, a possible allusion to poor baccarat winning in Las Vegas in July.

Other potential negatives were MGM’s development roster and continued inflationary pressures. Also cited was the fact that MGM no longer owns its real estate, “which could affect financial flexibility during weaker economic conditions.”

Please fill out the form to send a message to the CDC Gaming Reports team. Alternatively, you can send an email to the address on the footer of each page.