S&P puts MGM on positive watch

S&P said it placed all of the ratings on MGM Resorts International and MGM Growth Properties LLC, including their B+ corporate credit ratings, on CreditWatch with positive implications.

The agency said it could lift the company’s corporate credit rating one notch to BB- from B+ with a stable outlook upon the successful close of the Borgata acquisition.

The acquisition adds a market-leading, high-quality regional gaming asset to MGM's portfolio, increasing its diversity outside Las Vegas, S&P said.

Borgata's good free cash flow generation also will support MGM's goal to reduce leverage through 2017, the agency said.

MGM's consolidated leverage, pro forma for the acquisition, is expected to improve to the mid-5x range at the end of 2016 and to about 5x by the end of 2017, S&P said.

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