LAS VEGAS - MGM Resorts (NYSE:MGM) International (NYSE: MGM) announced today its proposal to offer $675 million in aggregate principal amount of senior notes due in 2029. The move is aimed at refinancing existing debt, specifically to repay the company's outstanding 5.750% senior notes due in 2025.
The gaming and entertainment giant stated that until the repayment of its indebtedness, it might place the net proceeds in short-term interest-bearing accounts, securities, or similar investments. The offered notes will be unsecured senior obligations and will be guaranteed by the company's wholly owned domestic subsidiaries that also guarantee MGM's other senior indebtedness. These notes will be equal in right of payment with all of the company’s existing or future senior unsecured indebtedness and each guarantor.
A consortium of banks, including BofA Securities, J.P. Morgan Securities, and Barclays (LON:BARC) Capital, among others, will act as joint book-running managers for the offering. The offering will be conducted under a prospectus supplement related to the notes and an accompanying prospectus filed as part of MGM's existing effective shelf registration statement with the Securities and Exchange Commission (SEC).
MGM Resorts International is a well-known name in the gaming and entertainment industry, operating a portfolio of 31 hotel and gaming destinations worldwide. In addition to its physical properties, the company has a 50/50 venture, BetMGM, LLC, which offers sports betting and online gaming in North America, and through LV Lion Holding Limited, it provides similar services in several jurisdictions throughout Europe.
The announcement clarified that this press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in any state or jurisdiction where such offer, solicitation, or sale would be unlawful. It also does not serve as a notice of redemption for the 5.750% senior notes due in 2025.
This financial maneuver comes as part of MGM Resorts' broader strategy to maintain a strong balance sheet and pursue growth opportunities, such as the development of an integrated resort in Japan and the expansion of its online gaming and sports betting footprint through BetMGM.
The company's plans are based on forward-looking statements, which involve certain risks and uncertainties that could cause actual results to differ materially from those projected. These include economic and market conditions, competition within the gaming and travel sectors, and the regulatory environment in new or existing markets.
The information presented in this article is based on a press release statement from MGM Resorts International.
InvestingPro Insights
As MGM Resorts International (NYSE: MGM) positions itself to refinance its debt and strengthen its balance sheet, key financial metrics from InvestingPro paint a picture of the company's recent performance. The company's Price/Earnings (P/E) Ratio over the last twelve months as of Q2 2024 stands at 8.96, suggesting a potentially attractive valuation relative to earnings. With a PEG Ratio of 0.03 in the same period, MGM's future earnings growth is priced at a rate that might catch the eye of investors looking for growth at a reasonable price.
The financial data also shows robust top-line growth, with a 138.17% increase in revenue over the last twelve months as of Q2 2024, and a quarterly revenue growth of 52.29% in Q2 2024. This indicates a significant expansion in the company's business, which aligns with MGM's strategic initiatives, such as its venture into online gaming and sports betting, as well as international expansion efforts.
InvestingPro Tips underscore the importance of considering the company's Gross Profit Margin, which at nearly 81% in the last twelve months as of Q2 2024, reflects a strong ability to translate sales into profit. Additionally, MGM's Operating Income Margin of 20.63% during the same period highlights efficient operational management. For investors, these margins provide insight into the company's profitability and operational effectiveness.
For those interested in a deeper analysis, InvestingPro offers a comprehensive list of additional tips to help investors make informed decisions. With MGM's latest financial maneuver, understanding the full scope of the company's financial health and growth prospects is crucial.
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