{"id":118031,"date":"2019-10-23T11:59:39","date_gmt":"2019-10-23T18:59:39","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=118031"},"modified":"2019-10-23T13:09:17","modified_gmt":"2019-10-23T20:09:17","slug":"mgm-continues-drawing-praise-for-its-recent-asset-sales","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/","title":{"rendered":"MGM Draws More Praise For Asset Sales With Analysts Bullish on Macau Prospects"},"content":{"rendered":"

MGM Resorts International (NYSE:MGM) continues drawing praise for its recently announced sales of the Bellagio and Circus Circus on the Las Vegas Strip, with analysts extolling the advantages of those deals while making bullish comments on the company’s Macau business.<\/p>\n

\"\"
MGM Cotai is one of several reasons Fitch Ratings likes the company’s prospects. (Image: YouTube)<\/figcaption><\/figure>\n

Last week, MGM said it will sell the Bellagio to a real estate entity controlled by Blackstone. As part of that deal, the gaming company will take a five percent stake in the real estate partnership. It will lease back the integrated resort with a 30-year contract calling for initial annual rent payments of $245 million. Separately, the company said it’s selling Circus Circus<\/a> to Phil Ruffin for $825 million.<\/p>\n

On an after-tax basis, those transactions, both of which are expected to be completed in the current quarter, will net MGM about $4.3 billion in proceeds. The company is widely expected to use that cash to reduce debt and boost dividends and share repurchases.<\/p>\n

The benefits of the potentially reduced leverage profile and the increase in the near-term liquidity from the sale proceeds are in part offset by MGM’s reduced longer-term financial flexibility related to the further monetization of its Las Vegas Strip assets, the real assets of its marquee Bellagio in particular,\u201d said a recent Fitch Ratings note.<\/p><\/blockquote>\n

The research firm affirmed its rating of \u201cBB\u201d on MGM. While that’s high-yield territory, Fitch is the second ratings agency this week<\/a> to make bullish comments on MGM’s Las Vegas divestments.<\/p>\n

Bullish Forecast<\/h2>\n

With some newer properties, including MGM Cotai and MGM Springfield still in the ramping-up phase, the operator can potentially boost earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) and free cash flow as soon as next year.<\/p>\n

\u201cMGM’s EBITDAR is set to grow as MGM Cotai and Springfield ramp-up, Empire City’s (acquired January 2019) EBITDAR starts to flow through, and returns on the Park MGM investment are realized,\u201d said Fitch.<\/p>\n

\n

Empire City is MGM’s venue in Yonkers, N.Y. Currently, that property only features slots and horse racing. But the company is hoping New York regulators will allow table games and sports wagering to be offered there as soon as 2021 instead of 2023<\/a>. Fitch likes the geographic diversity in MGM’s domestic gaming portfolio.<\/p>\n<\/div>\n

\u201cMGM’s portfolio of Las Vegas Strip assets are mostly high quality, and its regional assets are typically market leaders,\u201d said the research firm. \u201cThe regional portfolio’s diversification partially offsets the more cyclical nature of Las Vegas Strip properties.\u201d<\/strong><\/p>\n

Upbeat On Macau<\/h2>\n

At a time when many industry analysts are concerned about gaming revenue trends in Macau, Fitch is enthusiastic about MGM Cotai’s prospects, noting that property will account for $250 million in annual EBITDA once it’s fully ramped up.<\/p>\n

\u201cFitch’s favorable long-term view on Macau is supported by an expanding middle class in China and infrastructure development in and around Macau,\u201d said the credit evaluator.<\/strong><\/p>\n

Macau gaming licenses come due in 2022 and, as is the case with rival gaming companies<\/a>, MGM is likely to encounter little concession renewal risk, according to Fitch.<\/p>\n","protected":false},"excerpt":{"rendered":"

MGM Resorts International (NYSE:MGM) continues drawing praise for its recently announced sales of the Bellagio and Circus Circus on the Las Vegas Strip, with analysts extolling the advantages of those deals while making bullish comments on the company’s Macau business. Last week, MGM said it will sell the Bellagio to a real estate entity controlled […]<\/p>\n","protected":false},"author":46,"featured_media":118033,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810],"tags":[],"acf":[],"yoast_head":"\nMGM Continues Drawing Praise For Its Recent Asset Sales<\/title>\n<meta name=\"description\" content=\"MGM continues to garner applause for selling the Bellagio and Circus Circus, with one team of analysts also praising the company's Macau exposure.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MGM Continues Drawing Praise For Its Recent Asset Sales\" \/>\n<meta property=\"og:description\" content=\"MGM continues to garner applause for selling the Bellagio and Circus Circus, with one team of analysts also praising the company's Macau exposure.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2019-10-23T18:59:39+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-10-23T20:09:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/10\/MGMC.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/\",\"url\":\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/\",\"name\":\"MGM Continues Drawing Praise For Its Recent Asset Sales\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/10\/MGMC.jpg\",\"datePublished\":\"2019-10-23T18:59:39+00:00\",\"dateModified\":\"2019-10-23T20:09:17+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"MGM continues to garner applause for selling the Bellagio and Circus Circus, with one team of analysts also praising the company's Macau exposure.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/mgm-continues-drawing-praise-for-its-recent-asset-sales\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/10\/MGMC.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/10\/MGMC.jpg\",\"width\":1280,\"height\":720,\"caption\":\"MGM Cotai is one of several reasons Fitch Ratings likes the company's prospects. 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