MGM China confirms $3 billion refinancing package with five-year maturity and conditional ownership clause

MGM China Holdings has secured a new revolving credit facility worth approximately $3.02 billion, according to a recent filing with the Hong Kong Stock Exchange. The deal, backed by a group of unnamed lenders, will be used to refinance the company’s two existing credit facilities and support general corporate purposes, including working capital needs.

The five-year facility, set to take effect on April 22, 2025, will fully replace MGM China’s existing credit arrangements. The company stated that upon the first utilization of the new facility, outstanding balances under the prior agreements will be repaid in full and total commitments under the old facilities cancelled.

A key condition of the agreement is that MGM Resorts International, MGM China’s parent company, must maintain at least a 50% ownership stake in the Macau-based casino operator.

Should that threshold fall, the lenders reserve the right to demand immediate repayment of the loan. MGM Resorts currently holds approximately 56% of MGM China’s issued shares.

The 2025 credit facility will carry a floating interest rate tied to the Hong Kong Interbank Offered Rate (HIBOR), with an additional margin ranging from 1.62% to 2.75%, based on MGM China’s leverage ratio. The agreement also includes an accordion option, which would allow MGM China to increase its line of credit under certain conditions.

This refinancing follows media reports earlier in the year that MGM China was exploring a $2 billion syndicated loan. The company’s previous revolving credit facility was established in 2019 at HK$9.75 billion ($1.26 billion), followed by a second facility initially valued at HK$2.34 billion ($300 million) and later increased to HK$3.14 billion ($400 million).

MGM China recently announced a final dividend of HK$0.251 per share for the financial year ending 31 December 2024. The payout totals HK$953.8 million (US$122 million). The dividend follows a profit of HK$4.60 billion (US$590 million), up from HK$2.64 billion (US$340 million) in the previous year.

Much of this financial improvement has been attributed to the post-pandemic recovery in Macau, which contributed significantly to MGM Resorts’ record net revenues during the first and third quarters of FY2024. MGM China currently operates two major casino resorts in Macau, MGM Macau, opened in 2007, and the larger MGM Cotai, which began operations in 2018.