MGM China Announces $3.02B Revolving Credit Facility Refinancing Deal

MGM China Holdings has announced a refinancing deal worth $3.02 billion with an unnamed group of lenders.

In an official announcement, MGM China said it would use the deal, a revolving credit facility, to refinance two existing revolving credit facilities and for “general corporate purposes.”

The new facility will take effect on April 22 and will mature in 60 months.

However, the investors appear to have insisted that the US-based MGM Resorts International retains ownership of MGM China. A clause in the deal states that the investment must be repaid if the US firm’s ownership of the Macau casino operator drops below 50%.

MGM China: Details of Refinancing Deal

The deal comes after media reports in February claimed MGM China was looking to secure a $2 billion syndicated loan. Bloomberg quoted unnamed sources close to the deal as stating that the casino operator was speaking to over a dozen banks about a five-year agreement.

MGM China announced its first revolving credit facility, worth HKD 9.75 billion (around $1.25 billion), in August 2019.

The firm later agreed to extensions on this deal, which would mature in May next year. It later agreed on a second revolving credit facility of HKD 2.34 billion ($301.74 million). MGM China later increased the size of this facility to $402 million. The maturity date was also set to May 2026.

However, MGM China explained that the latest refinancing package will see the amounts due under the existing credit facilities repaid in full. “Total commitments thereof will be cancelled,” it wrote.

MGM China explained that the deal also includes an accordion option clause. This could potentially allow the borrower to increase its line of credit with its lenders.

The firm wrote: “The 2025 revolving credit facility will bear interest at a fluctuating rate per annum based on the Hong Kong Interbank Offered Rate, plus a margin (in the range of 1.625% to 2.75%), which will be determined by MGM China’s leverage ratio.”

MGM Resorts’ Record-breaking Reports

MGM opened its first Macau casino resort, the 600-room MGM Macau, in December 2007. The doors to MGM China’s second and largest venue, the MGM Cotai, opened in February 2018.

MGM Resorts retains around 56% of the company’s issued shares. The firm successfully launched an initial public offering on the Hong Kong Stock Exchange on June 3, 2011.

Last year, MGM China’s 14% year-on-year growth rates saw MGM Resorts post record net revenues for Q3 of FY2024.

This followed a record-breaking Q1 for MGM Resorts, with MGM China’s post-COVID recovery again credited for much of the growth.

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 MGM China Holdings has announced a refinancing deal worth $3.02 billion with an unnamed group of lenders. In an official announcement, MGM China said it would use the deal, a revolving credit facility, to refinance two existing revolving credit facilities and for “general corporate purposes.” The new facility will take effect on April 22 and
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