Fitch Ratings upgrades MGM China

Fitch Ratings has upgraded MGM China and MGM Resorts International’s credit ratings.

Macau.- Fitch Ratings has upgraded the credit ratings of MGM China and its parent company, MGM Resorts International. The ratings agency has given both a BB- Long-Term Issuer Default Rating (IDR) with a stable outlook.

Analysts expect MGM’s leverage to remain steady and that the company’s liquidity will be sufficient to fund its expansion plans. It signed a BB+/RR1 rating to MGM International’s senior secured revolver, a BB-/RR4 rating to MGM China’s senior unsecured revolvers, and a BB-/RR4 rating to MGM China’s senior unsecured notes.

See also: MGM China cancels US$750m credit facility

Fitch noted MGM’s reduction of its EBITDAR leverage from 8.4x in 2021 to 5.5x in 2023. The company’s EBITDA leverage, excluding leases from debt, improved from 8.6x to 2.8x over the same period, primarily through the application of free cash flow (FCF) and asset sales proceeds to debt reduction.

Fitch expects MGM’s future FCF generation and excess cash to support funding for growth opportunities and share repurchases. The agency also highlighted MGM’s increasing market share in the mass market segment, growing from 9 per cent to over 15 per cent in 2023, driven by the addition of new tables and the ramp-up of MGM Cotai.

See also: Fitch affirms Macau’s AA rating