S&P rates MGM Growth notes BB-

S&P said it assigned its BB- issue-level rating and 3 recovery rating to MGM Growth Properties Operating Partnership LP’s proposed $500 million of senior unsecured notes due 2025 and placed the rating on CreditWatch with negative implications. MGP Finance Co-Issuer Inc. is the co-issuer of the notes.

The 3 recovery rating indicates S&P’s expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a payment default.

The company plans to use the proceeds to repay a portion of borrowings under its $1.35 billion revolving credit facility, which it fully drew in the quarter ended March 31, to bolster its liquidity and redeem $700 million of MGM’s operating partnership units.

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