Wall Street‘s appetite for risk knows no bounds. True, year-end numbers from MGM Resorts International contain cause for confidence, including 8% higher domestic gambling revenue and 10% improved room revenues. However, MGM’s still sitting atop a $13.5 billion powder keg of long-term debt. So you have to admire MGM’s ability to peddle $1 billion in unsecured debt — look Ma, no collateral! — to Wall Street at 7.75% interest. The transaction enables MGM to push off a day of debt reckoning for another two years, whilst it uses dividends from MGM China to help pay the bills. (The Culinary Union can take heart in MGM’s projection of higher labor costs; the time for a new labor pact draws nigh.)
However, it’s amazing how quickly investors on the Street forgot that some of them were caught out during CityCenter‘s travails, having lent billions of unsecured dollars and coming within hours of bankruptcy, when Dubai World decided to play handball with MGM’s ass. Besides, it’s not like MGM doesn’t have a handsome asset portfolio it could pledge against this latest float. In fact, Wall Street’s gluttony for punishment is so intense that MGM was able to increase the size of the bond offering by $250 million.
If you’re holding some of Caesars Entertainment‘s recent little IPO, currently trading at $13/share, you might want to 
unload it presently. The company plans to put another 40 million shares on the market, in hopes of raising $500 million (or $12.50/share — lotsa luck). Another 22 million-plus shares may be unleashed by suckers investors who want to get off Capt. Loveman’s sinking ship. While the 40,000,000-share offering is only vaguely designated as being (partly) for development, it takes no great genius to realize that much of the diñero will be headed to Massachusetts, Caesars having committed itself to Suffolk Downs without having the requisite $500 million in hand. The question of how a mooted Baltimore casino would be bankrolled is still hanging fire, although Rock Gaming will probably pony up most of that dough.
Compounding the insanity, Caesars is willing to support a sweetheart deal for Prince George’s County, in return for such crumbs as table games and “only” a 60% tax rate. (A $1 billion casino on the East Coast is an oxymoron, although severe, state-imposed limits on competition might make one viable in the Boston area.) With Caesars’ debt servicing outpacing its cash flow and $19.8 billion in long-term debt overshadowing the company, this latest offering is Loony Tunes.
Found! The 2010 Massachusetts forum at which Gary Loveman felt so disrespected by scattershot state Sen. Susan Tucker that he was still seething with rage at Global Gaming Expo, eight months later.
