- MGM Resorts appears to be succeeding at boosting its cash on hand as the company is offering $500 million worth of senior notes due 2028.
- The casino operator had issued a $750 million public offering of senior notes at the end of April.
- The past few months have seen MGM make moves to secure cash, including a deal with MGM Growth.
- The company has been trying to reduce its expenses during the pandemic in many ways, including the laying off of staff members.
MGM Resorts International is having some success at boosting its cash on hand.
A Thursday filing with the US Securities and Exchange Commission shows that the Las Vegas-based casino operator is offering $500 million worth of senior notes due 2028. The offer comes as the ongoing pandemic continues to impact the business, results of operations, and the financial condition significantly.
This is not MGM’s first bond offer since the COVID-19 pandemic began. At the close of April, the operator issued a $750 million public offering of senior notes to improve its liquidity during the pandemic.
In Thursday’s filing, MGM said it had remained committed to managing its expenses to maintain its strong liquidity position during this time.
The casino operator had reopened all of its properties as of September 30. However, many still have limited amenities and occupancy rates. MGM Resorts said it was not yet sure how long it would take for the operations at its properties to return to normal, or if they would have to temporarily shut down any property.
The filing revealed that the company had approximately $3.6 billion in cash as of August 31. This amount doesn’t include cash and cash equivalents that MGM has invested with its affiliated real estate investment trust, MGM Growth Properties, or at MGM China. MGM has a 56.7% economic interest in MGM Growth Properties.
Recent months have seen the company make moves to secure cash, including a deal with MGM Growth to get cash in exchange for up to $14 billion of the company’s existing operating partnership units. So far, the casino operator has cashed in on $700 million and can opt to get an additional $700 million in cash.
All these moves should help MGM Resorts continue to pull through the storms the pandemic has brought.
When MGM closed its properties in the second quarter, it estimated that its monthly cash spending would be approximately $270 million. The expenditures included corporate and operating outlay, net rent, capital costs, and interest.
The actual cash outflow in April and May was slightly lower than anticipated. Also, MGM managed to reduce outgoings when its properties started reopening to the public. Much of the reduced expenditures came from cutting back amenities and its workforce.
MGM Resorts bid goodbye to 18,000 of its furloughed workers in August. The company said in the SEC filing that the “aggressive” cost-cutting measures could negatively affect guest loyalty and the ability to charm and retain workers.
The company’s shares were up 1.2% Thursday morning as they traded at $21.75 on the New York Stock Exchange.