Source: MGM Resorts 8-K Filing, April 15, 2025
MGM China Holdings Limited, an indirect majority-owned subsidiary of MGM Resorts International (NYSE: MGM), has entered into an unsecured revolving credit facility totaling HK$23.4 billion (approx. US$2.99 billion at current exchange rates).
The facility matures 60 months (5 years) from the agreement date, April 15, 2025.
The facility features an interest rate pegged to HIBOR (Hong Kong Interbank Offered Rate) plus a margin ranging 1.625%–2.75%, determined by leverage ratio metrics.
Purpose: Refinancing existing unsecured credit, supporting ongoing working capital, and optimizing corporate liquidity.
Covenants & Controls: Includes maximum consolidated total leverage ratio, minimum interest coverage ratio, and restrictions on liens and asset disposition.
In the event MGM Resorts International’s ownership of MGM China falls below 50%, the facility is subject to mandatory prepayment.
Debt Refinancing: Repayment in full of all outstanding amounts under the previous senior unsecured credit facilities by April 22, 2025.
Leverage Ratio: A key technical term, defined as the ratio of total debt to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), will directly impact future borrowing costs for MGM China.
Interest Coverage Ratio: Another technical covenant, measuring EBIT (Earnings Before Interest and Taxes) to interest expense, which ensures MGM China maintains strong ability to service debt.
Working Capital Optimization: The size and flexibility of the new facility provides MGM China with stronger liquidity, supporting daily operations and strategic capital allocation—an essential quantitative benefit for large-cap gaming operators in Asia’s competitive landscape.
MGM Resorts International and MGM China Holdings Limited have showcased financial prowess by locking in a HK$23.4 billion revolving credit facility. Such a substantial financial obligation, coupled with sophisticated mechanisms like leverage ratio monitoring and interest coverage maintenance, reveals MGM China’s commitment to robust financial discipline and strategic liquidity. According to the official 8-K filing:
“The Revolving Credit Facility will bear interest at a fluctuating rate per annum based on HIBOR plus a margin (in the range of 1.625% to 2.75%), which will be determined by MGM China’s leverage ratio.”
This revolving credit facility positions MGM Resorts and MGM China for dynamic growth in Macau and globally, most notably by freeing up capital for new investments and safeguarding against potential liquidity hazards. The incorporation of detailed, technical covenants not only aligns with best-in-class global capital management standards but also demonstrates the casino operator’s focus on operational resilience and market leadership.
Risk Management: The facility’s requirements—particularly the ownership clause—ensure ongoing alignment between MGM China and MGM Resorts International, reducing counterparty and change-of-control risks.
Shareholder Value: Enhanced liquidity and reduced debt servicing costs can translate into improved free cash flow and, potentially, higher returns for MGM shareholders.
Competitive Edge: Access to cost-efficient, substantial credit lines is a hallmark of premier global gaming operators—bolstering MGM China’s position in Asia’s highly competitive hospitality and entertainment sector.
The representations, covenants, and warranties embedded in the revolving credit facility are available for full review in Exhibit 10.1 of the SEC 8-K filing dated April 15, 2025. All stakeholders are encouraged to study the primary source for comprehensive disclosure.
“In addition, if MGM Resorts International ceases to own more than 50% of the issued ordinary share capital of MGM China then the Revolving Credit Facility must be prepaid in full.” — MGM Resorts 8-K, 2025
The new HK$23.4 billion facility exemplifies sound capital structuring, enhances MGM China’s financial flexibility, and reaffirms the group’s standing as a dominant force among global resort and gaming corporations.
For more details, visit the official SEC filing.