S&P puts CityCenter on positive watch

S&P said it placed all its CityCenter Holdings LLC on CreditWatch with positive implications.

The placement follows MGM Resorts International agreement to buy the 50% of CityCenter it doesn’t already own for $2.125 billion.

“We believe that the ongoing recovery in the Las Vegas market will enable MGM to reduce its S&P Global Ratings lease-adjusted net leverage below our 6.5x downgrade threshold in 2022 despite the leveraging effects of the acquisition and sale-leaseback transaction. In addition, we believe CityCenter's acquisition by a higher-rated entity will improve its credit quality and anticipate that MGM will likely repay all of its outstanding debt at the close of the transaction.,” S&P said in a press release.

The agency said it plans to resolve the CreditWatch once the deal closes and sale leaseback transaction with Blackstone, which would require MGM to repay about $1.7 billion, occurs. Once this happens S&P said it expects to discontinue all its CityCenter ratings.

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