{"id":26282,"date":"2014-11-23T08:00:09","date_gmt":"2014-11-23T16:00:09","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=26282"},"modified":"2014-11-24T01:32:19","modified_gmt":"2014-11-24T09:32:19","slug":"mgm-wynn-take-1-billion-new-debt","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/","title":{"rendered":"MGM and Wynn to Take on Over $1 Billion Each in New Debt"},"content":{"rendered":"
\"MGM
More than a Grand! MGM and Wynn to borrow over a billion dollars each to finance new projects. (Image: casino.org)<\/figcaption><\/figure>\n

MGM Resorts and Wynn Resorts have announced, in separate financial filings, that they are looking to take on over $1 billion each in new debt to help pay for upcoming casino projects in Massachusetts, and in MGM\u2019s case, Maryland.<\/p>\n

MGM<\/a> initially said it wanted to borrow $1 billion to cover the costs of the construction of its $800 million MGM Springfield and $1.2 billion MGM National Harbor development in Maryland, as well as to pay an old debt that matures in 2015, but has since bumped that figure up to $ 1.15 billion. The company is also currently building a $2.9 billion resort on the Cotai Strip in Macau.<\/p>\n

Meanwhile, Wynn Resorts said it has already secured a credit line of $375 million, as well a loan of over $875 million to cover some of the costs of its $1.6 billion casino-resort near Boston.<\/p>\n

Wynn Resorts<\/a>, in particular, was involved in an expensive bidding war in Massachusetts in order to win its license, and both companies must now fork out another $85 million each in licensing fees before a single stone is laid. Wynn has also agreed to pay $10 million towards a project to redevelop Sullivan Square, through which most of the traffic for its new casino will pass, as well as $20 million toward penalties on traffic above set targets in the square.<\/p>\n

Positive Reaction<\/strong>\u00a0<\/span><\/h2>\n

Fitch Ratings reacted positively to the announcement from MGM.<\/p>\n

\n

\u201cOverall Fitch views the issuance positively as it largely addresses MGM’s liquidity needs through the development phase of the company’s projects in Macau ($2.9 billion), Maryland ($1.2 billion) and Massachusetts ($800 million),\u201d said analyst Michael Paladino. \u201cThe issuance should be largely leverage neutral if MGM uses the proceeds to refinance $875 million in 6.625 percent senior notes that come due in July 2015.\u201d<\/p>\n<\/div>\n

Peggy Holloway, analyst for Moody\u2019s, said meanwhile that MGM\u2019s new debt could \u201csubstantially improve the company\u2019s near-term debt maturity profile\u201d because it would help eliminate the 2015 obligations.\u00a0<\/strong><\/p>\n

Debt Management<\/strong><\/h2>\n

MGM\u2019s current level of long-term debt stands at $13 billion, and Wynn\u2019s at $7.3billion, a hangover from the economic downturn of 2008 and subsequent recession. However, Bumazhny said that Fitch remained upbeat about the positive return on investment expected from the Maryland project, although less so Massachusetts.<\/p>\n

\u201cFitch views the Maryland project favorably from a return on investment (ROI) point of view, even after accounting for the increased $1.2 billion budget. Fitch estimates 14 percent to 20 percent ROI in Maryland,\u201d he said. \u201cThe high ROI reflects MGM’s position as the closest casino to the DC area, including the affluent Washington DC suburbs in Virginia.<\/p>\n

\u201cFitch is less optimistic on the Springfield proposal considering the licensing and host community fees as well as a less attractive supply\/demand dynamic. However, Fitch still estimates 9 percent to 15 percent ROI for the Massachusetts project, which is an acceptable ROI for a domestic gaming investment relative to the recent comparison set.\u201d<\/p>\n

Both company\u2019s levels of long-term debt pale in comparison to that of Caesars Entertainment which currently stands at $22.88 billion as of September. The company is currently engaged in a battle with its creditors and bondholders in a bid to restructure some $18 billion of it.<\/p>\n","protected":false},"excerpt":{"rendered":"

MGM Resorts and Wynn Resorts have announced, in separate financial filings, that they are looking to take on over $1 billion each in new debt to help pay for upcoming casino projects in Massachusetts, and in MGM\u2019s case, Maryland. MGM initially said it wanted to borrow $1 billion to cover the costs of the construction […]<\/p>\n","protected":false},"author":42,"featured_media":26287,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,18],"tags":[],"acf":[],"yoast_head":"\nMGM and Wynn to Take on Over $1 Billion Each in New Debt<\/title>\n<meta name=\"description\" content=\"MGM Resorts and Wynn Resorts take on over $1 billion to finance Massachusetts and other projects\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MGM and Wynn to Take on Over $1 Billion Each in New Debt\" \/>\n<meta property=\"og:description\" content=\"MGM Resorts and Wynn Resorts take on over $1 billion to finance Massachusetts and other projects\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/\" \/>\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=\"2014-11-23T16:00:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2014-11-24T09:32:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2014\/11\/MGM-Grand.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"660\" \/>\n\t<meta property=\"og:image:height\" content=\"371\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Casino.org Staff Writer\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Casino.org Staff Writer\" \/>\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-wynn-take-1-billion-new-debt\/\",\"url\":\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/\",\"name\":\"MGM and Wynn to Take on Over $1 Billion Each in New Debt\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2014\/11\/MGM-Grand.jpg\",\"datePublished\":\"2014-11-23T16:00:09+00:00\",\"dateModified\":\"2014-11-24T09:32:19+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/8c48bf89dc86da77b4d856c7b3b78d77\"},\"description\":\"MGM Resorts and Wynn Resorts take on over $1 billion to finance Massachusetts and other projects\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/mgm-wynn-take-1-billion-new-debt\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2014\/11\/MGM-Grand.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2014\/11\/MGM-Grand.jpg\",\"width\":660,\"height\":371,\"caption\":\"More than a Grand! 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