MGM to Boost Liquidity With $750m Senior Notes Offering
Offering of $750m is due in 2028 and expected to close on October 12, 2020
Proceeds will be used for “corporate purposes” including refinancing existing debt
MGM’s indebtedness stood at $11.4bn in June, while total liquidity was $8.1bn
BetMGM shows growth with 17% market share, annual revenue expected to reach $150-160m
Upsized from original $500m
MGM Resorts has will offer $750m of senior notes in an effort to boost its liquidity amid the COVID-19 pandemic.
On Thursday morning, the casino operator initially announced plans for a public offering of $500m of senior notes. This has since been increased to a total of $750m. The offering of 4.750% senior notes will be due in 2028. The transaction is expected to close on October 12 but is still subject to customary closing conditions.
According to MGM, any proceeds will be utilized “for general corporate purposes, which could include refinancing existing indebtedness.” The company could also invest in short-term interest-bearing accounts or securities.
MGM’s existing debt
MGM is set to release its Q3 results later this month, but the casino operator’s most recent earnings report shows significant losses for the company in 2020. This can be attributable to the closure of MGM’s land-based casino properties across the globe following the outbreak of COVID-19.
total net loss was $50.4m, in contrast to net income of $74.7m in 2019
MGM Resorts’ net loss was $857m for the second quarter – a significant shift from net income of $43m earned in 2019. Similarly, diluted loss per share was $1.67 compared to earnings per share of $0.08 in the previous year. For the first six months of 2020, total net loss was $50.4m, in contrast to net income of $74.7m in 2019.
On June 30, the company’s indebtedness stood at $11.4bn. This included $3.7bn at the MGP Operating Partnership and $2.5bn outstanding at MGM China. Total liquidity stood at $8.1bn, which consisted of cash, cash equivalents, and amounts available under the company’s accessible revolving credit facilities.
BetMGM continues its growth
Despite MGM Resorts’ troubles in the land-based casino market, BetMGM, its online casino and sports betting venture in partnership with GVC Holdings, continues its growth in the US.
The brand first launched in New Jersey in August 2018, before relaunching with an upgraded platform in September 2019. This year, it has seen significant online gaming growth in the Garden State, doubling its market share to 22% from the start of the year through August. In the same month, BetMGM registered New Jersey market share of 10% in online sports betting and 24% in retail sports betting.
full-year 2020 net revenue is expected to be in the range of $150m to $160m
According to GVC’s latest trading update released earlier this week, BetMGM is performing ahead of expectations so far for the year. Full-year 2020 net revenue is expected to be in the range of $150m to $160m. The BetMGM app is now live in eight states, with market share at approximately 17% in all of those markets.