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Fitch rates MGM notes B-
Fitch Ratings said it assigned a rating of B- with a recovery rating of RR4 to MGM Resorts International's proposed $500 million senior unsecured notes due 2019.
The outlook is stable.
The proceeds will be used to repay a portion of MGM's indebtedness, which may include amounts outstanding under its senior credit facility or outstanding debt securities, Fitch said.
The transaction will be largely leverage neutral, but could dampen the free cash flow profile slightly due to higher interest costs, depending on pricing of the notes, the agency said.
MGM's next maturity is the 6.75% senior unsecured notes coming due September 2012, Fitch said.
Fitch said it views the potential maturity extension favorably, but it does not warrant positive rating action given MGM's high leverage, heavy maturities through 2017, thin free cash flow profile and heavy dependence on an undisturbed Las Vegas Strip recovery.
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