from SNL Real Estate Daily
Fitch affirms MGM Growth Properties ratings
Byline: Pam Rosacia
Fitch Ratings affirmed the BB+ long-term issuer default ratings of MGM Growth Properties LLC and its operating partnership MGM Growth Properties OP LP, with a negative outlook.
The rating agency also affirmed the casino real estate investment trust's senior secured debt at BBB-/RR1 and unsecured debt at BB+/RR4.
Fitch attributed the ratings affirmation to the REIT's steady triple-net-lease cash flows, geographically diverse assets and conservative financial policy. The company's potential conflicts of interest vis-a-vis control by casino operator MGM Resorts International, high tenant concentration and lower contingent liquidity compared to more traditional REIT asset classes, however, present challenges.
The negative outlook was driven in part by the pressures faced by MGM Resorts, the REIT's sole tenant, caused by the pandemic and uncertain economic recovery at least in the near term, according to the rating agency.