MGM Resorts International that has already collected $1 billion loan in an unlocked agreement for 10 years in March, has now raised another $1 billion loan which will be payable by 2020. The rate of interest for the March loan was 7.75% while it is 6.75% for the new loan. Previously, a loan of $700 million was requested by the company which then rose to $1 billion and this deal will be concluded on Wednesday.
As stated by MGM Resorts, the overall income will pay off some part of the balance including loan under its senior credit deal or balance obligation securities. A long-standing loan worth $13.4 billion is owned by the company which is second-largest amount in the casino industry. An enduring $1.3 billion loan will be terminated in the coming year. There are 10 Strip resorts such as The Mirage, Bellagio and MGM Grand plus a 50% ownership venture in CityCenter under the possession of MGM.
The Investors Service of Moody has an optimistic approach towards the declaration made by MGM as it will support the balance sheet. As per analyst Peggy Holloway of Moody, this deal will make sufficient funds available with MGM so as to carry out casino operations and the entire liabilities of 2013. It will also help in reorganization of funds for the liabilities in the coming two years. As stated by Brian Bertsch, the gaming analyst of Fitch Ratings Service, Fitch takes this deal as well as the enhanced cash flow projections into MGM positively as it will have an affirmative effect on the evaluation deed in future.
Bill Lerner, the managing director of Union Gaming Group hoped an interest rate less that 7.75% keeping in view the better credit market conditions and the shorter maturity. In his statement to shareholders, he further expressed that the Group takes the present declaration by MGM positively if company keeps on clearing the enduring debts in balance sheet and makes it way in the capital markets in a constructive manner and enhance the funds at the same time. MGM Resorts is also looking forward to prospects of development in American as well as oversees gaming markets. An election program is being supported economically by the company in order to get permission for construction of a gaming complex worth $700 million at a distance of 10 miles from Washington D.C.
Similarly, a license is asked for by the company in Western Massachusetts that will allow MGM to build a casino in Springfield. The latest discussions about casino development in Toronto and New York City also involved MGM Resorts. Friday witnessed a 12 cents or 1.06% raise in shares of MGM Resorts which shutdown at $11.40 on the New York Stock Exchange.