MGM Resorts International and MGM Growth Properties have today announced that MGM Growth Properties has redeemed approximately 23.5 million of MGM Resorts’ operating partnership units for $700 million, which represents the remaining amount under the agreement with MGM Growth Properties to purchase up to $1.4 billion of MGM Resorts’ Units for cash.
CEO and President of MGM Resorts Bill Hornbuckle commented:
“Today’s announcement reflects our continued focus on enhancing our balance sheet to strengthen our financial flexibility.
As the pandemic continues to impact operations at our properties across the US, we believe the opportunistic exercise of our redemption right as well as our recent senior notes offering allow us to continue pursuing our strategic goals while navigating the crisis.”
MGM Resorts intends to use the $700 million in proceeds for general corporate purposes.
Upon completion of the transaction, MGM Resorts will have approximately 149 million units, representing a 53% economic ownership in MGP.
In addition, MGM Resorts continues to hold significant real estate assets, including its ownership of MGM Springfield, its 50% interest in CityCenter in Las Vegas and its 56% interest in MGM China.
CEO of MGM Growth Properties James Stewart added:
“Our recent capital raise will allow us to fully fund this final redemption under the waiver agreement with cash on hand while still maintaining a balance sheet positioned for future growth.
The redemption is expected to be single digit accretive to our current AFFO per share while allowing us to maintain pro rata net leverage of 5.3x, which is within our targeted range of 5.0 to 5.5 times.”