MGM’s subsidiary filed for stock market launch

The Real Estate Investment Trust –REIT– will own 10 of MGM’s properties.

US.- MGM Resorts International announced yesterday that its real estate subsidiary filed the requirements for initial public offering. The big public step for the company is expected to sell US$100 million offering shares, although economic experts suggest that the number could grow to US$1 billion. The Securities and Exchange Commission received the MGM Growth Properties LLC’s formulations to be traded on the New York Stock Exchange, where the acronym for the major gaming company will be MGP.

MGM Growth Properties will concentrate 20 entertainment complex featuring 100 retail and 200 food and beverage outlets, 2.5 million square feet of spaces destined for meetings, as well as 24,466 hotel rooms. These venues will be located in 7 of the Las Vegas Strip complex: Excalibur, Luxor, Mandalay Bay, Mirage, Monte Carlo, New York-New York and the Park dining and entertainment resort. And in other 3 properties: Beau Rivage in Biloxi –Mississippi–, Gold Strike in Tunica –Mississippi– and MGM Grand Detroit.

“In addition to the gaming and gaming-related properties we may acquire from MGM from time to time in the future, we will also actively seek to identify additional entertainment and gaming-related properties for potential acquisition from non-MGM entities. We intend to selectively grow our portfolio of gaming properties through the acquisition of assets that contribute to our tenant and geographic diversification, can be leased subject to long-term leases with tenants with established operating histories, have low operating risks and provide stable cash flows, consistent with our properties,” described the filing.

The filing was sent after Nevada Gaming Commission had approved new regulation for corporate moves related to the REITs. Currently, the MGM Resorts share rose 1.29 percent to close at US$21.24 yesterday. MGM Resorts will initially pay US$550 million in annual rent under its master lease with the REIT that covers 10 years with the possibility to be extended. Furthermore, MGM Growth Properties suggested that “a number of gaming operators would be open to sale-leaseback transactions that would be designed to monetize their real estate assets.”