MGM China Looking for $2 Billion in Financing

Posted on: February 25, 2025, 09:13h. 

Last updated on: February 26, 2025, 09:57h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Company runs two Macau casino resorts
  • Would be its first loan since the coronavirus pandemic

MGM China is reportedly in talks with a group of lenders regarding a $2 billion syndicated loan, which would be the casino operator’s first round of financing since the start of the coronavirus pandemic in 2020.

MGM China
The MGM Macau integrated resort. Operator MGM China is reportedly seeking $2 billion in financing. (Image: CNBC)

Citing unidentified sources with knowledge of the matter, Bloomberg reported MGM China is talking with as many as a dozen lenders in an effort to land $2 billion, which would be used to fund expansion plans at MGM Macau and MGM Cotai casino hotels — its gaming venues in the special administrative region (SAR). It’s expected that if the operator lands the financing, a portion of the proceeds would be used to refinance existing debt, which stood at $3 billion at the end of 2024. The financing is being sought at a time of growth for the operator.

MGM China saw market share at all-time high of 15.8% in 2024, up from 15.2% in 2023 and compared to 9.5% in 2019. MGM COTAI market share was 9.3% and MGM MACAU was 6.5%,” according to the gaming company’s 2024 results press release issued on February 12.

Las Vegas-based MGM Resorts International (NYSE: MGM) owns 56% of MGM China.

Capital Markets Open to Gaming Companies

The rumor regarding MGM China’s effort to land a $2 billion syndicated loan, which would be denominated in Hong Kong dollars, arrives at a time when gaming companies are enjoying strong access to capital markets.

Recently, Las Vegas Sands (NYSE: LVS) landed $9 billion to expand its Marina Bay Sands integrated resort in Singapore, marking one of the biggest corporate loans in the history of the city-state. Online sportsbook giant DraftKings (NASDAQ: DKNG) is shopping for a $500 million term loan.

In the case of MGM China, procuring the syndicated loan shouldn’t be a tough task because the operator had $2.21 billion in cash on hand at the end of last year and it’s supported in part by MGM’s own sturdy financial position – factors that will be taken into account by lenders. As highlighted by 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA), and gross gaming revenue (GGR) numbers, MGM China has the goods creditors are looking for.

“MGM China continued to outperform industry recovery in 2024. Property visitation grew 54% year-on-year, reached 163% of 2019. Daily GGR was up 29% to 129% of 2019. Mass GGR (including slot) was up 33% to reach 179% of pre-COVID levels,” according to the statement.

Potential Risks to MGM China Loan Bid

MGM China’s cash position, credit metrics, and earnings growth are supportive of it being able to procure the $2 billion in financing it seeks, but creditors are likely to apply some scrutiny regarding the broader health of the Macau gaming market.

Entering this year, analysts pondered the odds of the casino hub’s GGR returning to prepandemic highs, with some saying it could be another year before those levels are reached. There’s also concern that China’s slowing economy and a potential trade war with the US could weigh on Macau visitation.