MGM resorts start a late Christmas celebration as the operators have just finished wrapping an additional round of unit-placement with the REIT, or Real Estate Investment Trust, MGP, or the MGM Growth Property. The casino operators have allowed the MGP to accumulate approximately $700 million. This transaction was only a part of an existing contract between two companies.
The contract stipulates the MGM resorts could compensate almost 1.4-billion-dollars’ worth of its wager in MGP. The entity already has consummated one 700-million-dollar transaction according to the contract in the last May.
Completion Bonus Achieved
MGM is to spend the acquired money for common corporate purposes. At this time of the year, with occasions like Christmas, lavish company parties and Christmas bonuses are the best forms of such common corporate purposes. However, Bill Hornbuckle, the CEO of the MGM, hopes to infuse a part of the money for giving the Company better financial flexibility to redeem the demolition caused by the corona pandemic. He also expects the Company will consider buying some of the Sands properties in Sin City.
With a liquidity volume of around $5.9 billion, MGM is one of the robust companies in the casino world. However, no amount of money will ever be sufficient when it comes to the enhancement and further development. There will always be scope to inject money to reconstruct or lay another level of prosperity. So, this reward money will allow MGM to take such up-gradation measures.
With the MGP’s purchase, the pre-agreed arrangement to buy an equity stake of MGM with REIT has been consummated. Consequently, the casino operator now merely owns REIT’s 53% shares, which have plummeted from 56.7%, which was held by it since May.
MGP is observing a significant increase through all the transactions. It should now attempt to find more support from the investor’s end. Moreover, the Company has succeeded in upgrading its position on its AFFO. AFFO, or acquired funds from operations, is the measure that shows the strength and worth of REIT. The Company also seems to pluck success in maintaining a pro-rata total leverage of 5.3x. The Company’s objective was to keep it between 5x and 5.5x.
