MGM Resorts raises $750million via senior notes

After a successful issuance of its most recent senior notes, MGM Resorts International has raised $750 million in capital.

The $750 million offering was made at par and at a 6.500% interest rate; it was due in 2032. With the net proceeds from the notes' offering, MGM Resorts plans to pay off its outstanding 6.750% senior notes due in 2025 as well as other outstanding debt.

In the event of bankruptcy, bonds in the form of senior notes will be given priority over other debts. Senior notes interest rates are lower than those of other bonds because they are less risky.

 

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MGM Resorts International's successful issuance of $750 million in senior notes at a 6.500% interest rate due in 2032 reflects a strategic move to strengthen its financial position and manage its debt obligations effectively. By raising capital through senior notes, MGM Resorts aims to retire existing debt, such as the 6.750% senior notes due in 2025, and potentially reduce its overall interest expense.

Senior notes, being a form of debt that ranks higher in priority than other obligations in case of bankruptcy, offer investors a certain level of security compared to other types of bonds. This security is reflected in their lower interest rates, as investors are compensated for taking on relatively lower risk. The issuance of senior notes allows companies like MGM Resorts to access capital at competitive rates while providing investors with a stable income opportunity.

Overall, MGM Resorts' decision to raise $750 million through senior notes demonstrates its proactive approach to managing its financial commitments and optimizing its capital structure. By leveraging this capital infusion to address existing debt and potentially improve its liquidity position, MGM Resorts aims to enhance its financial stability and create value for its stakeholders.