from SNL Real Estate Daily
Fitch affirms MGM Growth ratings, changes outlook
Byline: Maera Tezuka
Fitch Ratings affirmed its BB+ long-term issuer default ratings on MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP, with the outlook revised to negative from stable.
The rating agency also affirmed the operating partnership's senior secured debt at BBB-/RR1 and senior unsecured debt at BB+/RR4.
The affirmation takes into account the solid positions of the casino real estate investment trust and its tenants to withstand the coronavirus pandemic's near-term effects, as well as the company's stable triple net lease cash flows, good geographic asset diversification and conservative financial policy.
Fitch, however, noted that the REIT has high tenant concentration, potential conflicts of interest with respect to control by MGM Resorts International and lower contingent liquidity than more traditional asset classes.The negative outlook mirrors the BB- long-term issuer default rating and negative outlook of MGM Growth's tenant, MGM Resorts, as well as the operational disruptions faced by the latter while its casinos are closed because of the pandemic, according to the rating agency.