Fitch rates MGM Resorts notes BB

Fitch Ratings said it assigned a BB rating with recovery rating of RR2 to MGM Resorts International’s announced $1 billion senior unsecured notes due 2023.

Fitch also said it upgraded MGM’s issuer default rating to B+ from B in September 2014 and maintained MGM’s positive outlook.

The company also has a BB+ senior secured credit facility rating with recovery rating of RR1, BB rating on its senior unsecured notes with recovery rating of RR2 and BB rating on its convertible senior notes due 2015 with recovery rating of RR2.

MGM China Holdings, Ltd. and MGM Grand Paradise SA (co-borrowers) have issuer default ratings of BB and a BBB- rating on its senior secured credit facility, consisting of a $1.45 billion revolver and $550 million term loan.

The proceeds will be used for general corporate purposes, including repaying certain debt due in 2015 and funding a portion of the development costs related to MGM’s Maryland and Massachusetts projects, Fitch said.

Fitch said it views the issuance positively as it largely addresses MGM’s liquidity needs through the development phase of the company’s projects in Macau, Maryland and Massachusetts.

The issuance should be largely leverage-neutral if MGM uses the proceeds to refinance $875 million in 6 5/8% senior notes that come due in July 2015, the agency said.

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