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Moody's: MGM outlook positive
Moody's Investors Service said it changed MGM Resort International's outlook to positive from stable and assigned a Caa1 (LGD 3, 48%) rating to its new $500 million 10% senior unsecured notes due 2016.
The company's Caa1 corporate family rating, Caa2 probability-of-default rating, B1 senior secured rating, Caa1 senior unsecured rating and Caa3 senior subordinated ratings were affirmed. The SGL-3 speculative grade liquidity rating remains unchanged.
Also unchanged included the Mandalay Resort Group's senior notes at Caa1 and senior subordinated notes at Caa3.
The outlook revision reflects the favorable impact on MGM's liquidity following the company's recent $511 million equity issuance and the new $500 million senior secured bond offering, Moody's said.
As a result of these two transactions, the agency said it anticipates that MGM will now have sufficient revolver capacity to meet its 2011 and 2012 required debt amortizations and guaranty funding obligations.
The ratings also anticipate that credit metrics will remain weak despite the company's improved near-term liquidity profile, Moody's added.
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