MGM Resorts’ REIT spin off to assume, refinance $4 billion of debt

New York, Oct. 29 – MGM Resorts International said a real estate investment trust that it plans to create will assume $4 billion of debt and then refinance those borrowings through the issuance of debt and equity.

The new real estate investment trust, to be called MGM Growth Properties LLC, will receive 10 of MGM Resorts’ “premier” properties, Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor, Excalibur and The Park in Las Vegas plus the MGM Grand Detroit in Michigan and Beau Rivage and Gold Strike Tunica, both in Mississippi.

MGM Resorts will continue to manage the properties.

By creating the publicly traded triple-net lease REIT, MGM Resorts aims to highlight the “significant long-term value of its real estate” and reduce leverage.

“This transaction provides MGM Resorts’ shareholders numerous strategic and financial benefits, including delevering our balance sheet and enhancing long-term shareholder value,” said Jim Murren, chairman and chief executive officer of MGM Resorts, in a news release. “MGM Resorts is creating a new growth platform to allow it to more effectively execute its strategic initiatives, including portfolio diversification.”

The spin off is expected to be completed in the first quarter of next year.

MGM Resorts is a Las Vegas-based operator of resorts and casinos.

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