Fitch Ratings affirms MGM Resorts’ BB- rating after CityCenter purchase
Fitch Ratings Inc has predicted that Macau’s gross gaming revenue should reach pre-pandemic levels in 2024. The Las Vegas market is predicted to see a faster return to normal, with 2023 the predicted recovery date.
But the agency has cautioned that full recovery to 2019 levels would depend on current trends and the fluctuating global situation, taking into account “potential for renewed pandemic restrictions amid slowing domestic vaccination penetration and uncertainty regarding viral variants.”
Previously, there were hopes Macau could return to pre-pandemic levels by 2023, with optimistic expectations even suggesting 2022.
The agency stated that the US market will see a faster recovery mainly due to local demand, particularly slots, which can offset the lack of international players visiting casinos. In May, Nevada recorded $1.23bn in gaming revenue, a 25% growth compared to the same month in 2019.
Fitch Ratings also focused specifically on MGM Resorts International and its recent acquisition of the remaining stake in CityCenter in Las Vegas, which reportedly cost the company $2.32bn.
MGM Resorts would then sell CityCenter to The Blackstone Group for $3.89bn and lease back the Aria Resort and Casino, and Vdara Hotel and Spa, within the complex.
Fitch assigned MGM Resorts and MGM China a BB- rating, giving it a negative outlook, mainly due to “risks and uncertainty the global gaming industry is facing from the coronavirus pandemic, particularly jurisdictions that rely on international visitation.”
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