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Msg  51 of 55  at  3/20/2020 1:27:44 PM  by

jerrykrause


Moody's places MGM Resorts on review for potential downgrade

 from  SNL Real Estate Daily
 

Moody's places MGM Resorts on review for potential downgrade

 
Byline: Amanda Jean Dalugdug
 

Moody's Investors Service on March 16 placed MGM Resorts International's ratings on review for a possible downgrade to reflect the projected negative impact of the coronavirus outbreak to the company's operations.

The rating agency said it will review MGM's Ba3 corporate family rating, Ba3-PD probability of default rating and its Ba3 rated senior unsecured notes.

Moody's also placed the Ba3 rating on the senior unsecured notes of MGM's subsidiary, MGM China Holdings Ltd., on review for downgrade. The agency said MGM's SGL-1 speculative-grade liquidity rating is not affected.

"The review for downgrade is prompted by steep declines in visitation and gaming revenue at MGM's properties in Macau as a result of the spread of the coronavirus that has restricted travel in the region, as well as expected reduced travel, consumer and business activity in the U.S.," Moody's gaming analyst Adam McLaren said in a statement.

Moody's took a similar ratings action on MGM rival Las Vegas Sands Corp. as efforts to contain the spread of the virus in Macao and the U.S. reduce visitation numbers for casino operators.

MGM's Macao operations account for 23% of the group's total revenue, the rating agency said.

Moody's said its review on MGM will focus on the company's ability to preserve its liquidity during this period of significant earnings decline, in addition to the ramp of visitation and gaming revenue in Macao, as well as the impact on future travel and visitation from the spread of the coronavirus globally.

MGM has recently announced measures to combat the spread of the virus at its venues. On March 15, MGM, along with Las Vegas peer Wynn Resorts Ltd., announced temporary closures of their venues in the city following Nevada's state of emergency declaration.

To cope up with the impact of market volatility caused by the coronavirus outbreak, MGM has canceled its plan to repurchase up to $1.25 billion of its outstanding shares of common stock.

 


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