S&P rates MGM Growth facility BB, notes B+

Standard & Poor's said it affirmed the B+ corporate credit rating on MGM Resorts International and revised the outlook to positive from stable.

The agency also assigned MGM's new real estate investment trust, MGM Growth Properties LLC (MGP), the B+ corporate credit rating with a positive outlook.

At the same time, S&P assigned a BB issue-level rating and 1 recovery rating to MGM Growth Properties Operating Partnership LP's (a subsidiary of MGP) proposed $2.75 billion senior secured credit facility (consisting of a $600 million revolving credit facility due 2021, a $300 million term loan A due 2021 and a $1.85 billion term loan B due 2023). The 1 recovery rating indicates an expectation for very high (90% to 100%) recovery for lenders in the event of a payment default.

The agency also assigned a B+ issue-level rating and 3 recovery rating to MGM Growth Properties Operating Partnership's proposed $1.05 billion senior unsecured notes. The 3 recovery rating indicates an expectation for meaningful recovery (50% to 70%; lower half of the range) for lenders in the event of a payment default.

Proceeds, along with a planned sale of a minority equity stake in MGP, will be used to repay existing MGM Resorts debt and to pay transaction fees and expenses.

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