MGM Resorts International has agreed to provide a subordinated revolving loan facility of up to US$750 million to its Macau-based subsidiary, MGM China, the latter announced this morning.
According to details filed with the Hong Kong Stock Exchange, the availability of the facility “further bolsters the company’s already strong financial position in meeting future working capital and other funding needs.”
It also “highlights both MGM Resorts International’s and [MGM China’s] confidence in the long-term growth potential of Macau.”
The term of the facility is 24 months after the date of the agreement with an interest rate to be the greater of 4% per annum and the prevailing market rate, the company said.
MGM Resorts is the controlling shareholder of MGM China with a 56% stake.
The facility comes just a week after MGM China reported a US$70 million EBITDAR loss for the September 2022 quarter, having previously reported a HK$2.41 billion (US$306 million) loss attributable to owners of the company for the first six months of 2022.
Macau’s gaming revenues continue to be heavily impacted by mainland China’s COVID-zero policy, with widespread lockdowns and strict border controls continuing to limit travel to the SAR. It is hoped that the recent reopening of the mainland’s eVisa system for travel to Macau will provide a much needed boost before the end of the calendar year.
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