MGM Resorts International is no doubt looking forward to next April, when a convertible bond issued in 2010 reaches maturity. When the 4.25 percent, .45 billion bond converts into stock valued at .58, according to Bloomberg News, it will cut MGM’s debt to about $11 billion and eliminate $60 million in annual interest payments.
“That would be a dramatic improvement,” said Chief Financial Officer Dan D’Arrigo last week. “It positions the balance sheet for further deleveraging.”
The company borrowed money to buy Mandalay Bay in 2005 and build CityCenter, which was completed in 2009.
D’Arrigo said sluggish revenues in Macau, precipitated by a government crackdown on potential money laundering, should not have a major impact on the company’s business.
“Whenever there’s uncertainty people kind of take a step back,” he said. “We think over time, as people understand the new norm, people will come back.” MGM is currently building a $2.9 billion resort on the Cotai Strip. It is set to open in 2016.
