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Long-Term Debt | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Long-Term Debt | NOTE 9 — LONG-TERM DEBT Long-term debt consisted of the following:
|  | December 31, |
|  | 2020 |  |  | 2019 |
|  | (In thousands) |
Senior credit facility |  | $ | — |  |  | $ | — |
Operating Partnership senior credit facility |  |  | 10,000 |  |  |  | 1,703,750 |
MGM China credit facility |  |  | 770,034 |  |  |  | 667,404 |
7.75% senior notes, due 2022 |  |  | 1,000,000 |  |  |  | 1,000,000 |
6% senior notes, due 2023 |  |  | 1,250,000 |  |  |  | 1,250,000 |
5.625% Operating Partnership senior notes, due 2024 |  |  | 1,050,000 |  |  |  | 1,050,000 |
5.375% MGM China senior notes, due 2024 |  |  | 750,000 |  |  |  | 750,000 |
6.75% senior notes, due 2025 |  |  | 750,000 |  |  |  | — |
5.75% senior notes, due 2025 |  |  | 675,000 |  |  |  | 1,000,000 |
4.625% Operating Partnership senior notes, due 2025 |  |  | 800,000 |  |  |  | — |
5.25% MGM China senior notes, due 2025 |  |  | 500,000 |  |  |  | — |
5.875% MGM China senior notes, due 2026 |  |  | 750,000 |  |  |  | 750,000 |
4.5% Operating Partnership senior notes, due 2026 |  |  | 500,000 |  |  |  | 500,000 |
4.625% senior notes, due 2026 |  |  | 400,000 |  |  |  | 500,000 |
5.75% Operating Partnership senior notes, due 2027 |  |  | 750,000 |  |  |  | 750,000 |
5.5% senior notes, due 2027 |  |  | 675,000 |  |  |  | 1,000,000 |
4.5% Operating Partnership senior notes, due 2028 |  |  | 350,000 |  |  |  | 350,000 |
4.75% senior notes, due 2028 |  |  | 750,000 |  |  |  | — |
3.875% Operating Partnership senior notes, due 2029 |  |  | 750,000 |  |  |  | — |
7% debentures, due 2036 |  |  | 552 |  |  |  | 552 |
|  |  | 12,480,586 |  |  |  | 11,271,706 |
Less: Premiums, discounts, and unamortized debt issuance costs, net |  |  | (103,902 | ) |  |  | (102,802 | )
|  | $ | 12,376,684 |  |  | $ | 11,168,904 |
Debt due within one year of the December 31, 2019 balance sheet was classified as long-term as the Company had both the intent and ability to refinance current maturities on a long-term basis under its revolving credit facilities. Interest expense, net consisted of the following:
| Year Ended December 31, |
| 2020 |  |  | 2019 |  |  | 2018 |
| (In thousands) |
Total interest incurred | $ | 679,251 |  |  | $ | 853,007 |  |  | $ | 821,229 |
Interest capitalized |  | (2,871 | ) |  |  | (5,075 | ) |  |  | (51,716 | )
| $ | 676,380 |  |  | $ | 847,932 |  |  | $ | 769,513 |
Senior credit facility. At December 31, 2020, the Company’s senior credit facility consisted of a $1.5 billion revolving facility. The revolving facility bears interest of LIBOR plus 1.50% to 2.25% determined by reference to a total net leverage ratio pricing grid. At December 31, 2020, no amounts were drawn on the revolving credit facility. On February 14, 2020, in connection with the MGP BREIT Venture Transaction, the Company used proceeds from the transaction to repay and terminate the $1.5 billion outstanding on its existing revolving facility in full and entered into an unsecured credit agreement, comprised of a $1.5 billion unsecured revolving facility that matures in February 2025. As a result, the Company incurred a $4 million loss on early retirement of debt recorded in “Other, net” in the consolidated statements of operations. In April 2020, the Company amended its credit facility to provide it with certain relief from the effects of the COVID-19 pandemic. The amendment provides the Company a waiver of the financial maintenance covenants for the period beginning with the quarter ending June 30, 2020 through the earlier of (x) the date the Company delivers to the administrative agent a compliance certificate with respect to the quarter ending June 30, 2021 and (y) the date the Company delivers to the administrative agent an irrevocable notice terminating the covenant relief period (such period, the “covenant relief period”). In connection with the amendment, the Company pledged the Operating Partnership units held by loan parties to the lenders as collateral. The Company also agreed to certain limitations including, among other things, further restricting its ability to incur debt and liens, make restricted payments, make investments and prepay subordinated debt. In addition, in connection with the amendment, the Company agreed to a liquidity test that requires the Company’s borrower group (as defined in the credit agreement) to maintain a minimum liquidity level of not less than $600 million (including unrestricted cash, cash equivalents and availability under the revolving credit facility), tested at the end of each month during the covenant relief period. In February 2021, the Company further amended its credit facility to extend the covenant relief period through (but excluding) the second quarter of 2022 and a djust the required leverage and interest coverage levels for the covenant when it is reimposed a t the end of the waiver period. Pursuant to that amendment, the Company agreed to increase its total required minimum liquidity level to $1.0 billion. The Company’s senior credit facility contains customary representations and warranties, events of default and positive and negative covenants. The Company was in compliance with its applicable covenants at December 31, 2020. As of December 31, 2019, the senior credit facility was secured by (i) a mortgage on the real properties comprising the MGM Grand Las Vegas, (ii) a pledge of substantially all existing and future personal property of the subsidiaries of the Company that own the MGM Grand Las Vegas; and (iii) a pledge of the equity or limited liability company interests of the entities that own the MGM Grand Las Vegas and the Bellagio. In connection with the MGP BREIT Venture Transaction, on February 14, 2020, the Company entered into an unsecured credit agreement which provides that we will grant a security interest in our Operating Partnership units in the future to the extent our leverage ratio exceeds certain thresholds. Operating Partnership senior credit facility and bridge facility. At December 31, 2020, the Operating Partnership’s senior secured credit facility consisted of a $1.35 billion revolving credit facility. The revolving facility bears interest of LIBOR plus 1.75% to 2.25% determined by reference to a total net leverage ratio pricing grid and will mature in June 2023. At December 31, 2020, $10 million was drawn on the revolving credit facility and the interest rate on the revolving credit facility was 1.90%. In February 2020, in connection with the MGP BREIT Venture Transaction, the Operating Partnership amended its senior secured credit facility to, among other things, allow for the transaction to occur, permit the incurrence by the Operating Partnership of a nonrecourse guarantee relating to the debt of the MGP BREIT Venture (refer to Note 12 for description of such guarantee), and permit the incurrence of the bridge loan facility. As a result of the transaction and the amendment, the Operating Partnership repaid its $1.3 billion outstanding term loan B facility in full with the proceeds of a bridge facility, which was then assumed by the MGP BREIT Venture as partial consideration for the Operating Partnership’s contribution. Additionally, the Operating Partnership used the proceeds from the settlement of the forward equity issuances to pay off the outstanding balance of $399 million on its term loan A facility in full. As a result, the Operating Partnership incurred an $18 million loss on early retirement of debt recorded in “Other, net” in the consolidated statements of operations. The Operating Partnership is party to interest rate swaps to mitigate the effects of interest rate volatility inherent in its variable rate debt as well as forecasted debt issuances. As of December 31, 2020, the Operating Partnership has currently effective interest rate swap agreements on which it pays a weighted average fixed rate of 1.821% on total notional amount of $1.9 billion. The Operating Partnership has an additional $900 million total notional amount of forward starting interest rate swaps that are not currently effective. The fair value of interest rate swaps designated as cash flow hedges was $41 million, with $1 million recorded as a current liability and $40 million recorded as a long-term liability as of December 31, 2020, and $7 million recorded as an asset and $28 million recorded as a long-term liability as of December 31, 2019. The fair value of interest rate swaps not designated as cash flow hedges was $78 million, with $31 million recorded as a current liability and $47 million recorded as a long-term liability as of December 31, 2020, and $3 million recorded as a long-term liability as of December 31, 2019, respectively. Interest rate swaps in an asset position are recorded within “Other long-term assets,” those in a current liability position are recorded within “Other accrued expenses,” and those in a long-term liability position are recorded within “Other long-term liabilities” on the consolidated balance sheets. The Operating Partnership credit facility contains customary representations and warranties, events of default and positive and negative covenants, including that the Operating Partnership maintain compliance with a maximum senior secured net debt to adjusted total assets ratio, a maximum total net debt to adjusted assets ratio and a minimum interest coverage ratio. The Operating Partnership was in compliance with its credit facility covenants at December 31, 2020. The Operating Partnership senior credit facility is guaranteed by each of the Operating Partnership’s existing and subsequently acquired direct and indirect wholly owned material domestic restricted subsidiaries, and secured by a first priority lien security interest on substantially all of the Operating Partnership’s and such restricted subsidiaries’ material assets, including mortgages on its real estate, excluding the real estate assets of MGM National Harbor and Empire City, and subject to other customary exclusions. MGM China credit facility. At December 31, 2020, the MGM China credit facility consisted of a $1.25 billion unsecured revolving credit facility. The revolving credit facility bears interest at a fluctuating rate per annum based on Hong Kong Interbank Offered Rate (“HIBOR”) plus 1.625% to 2.75%, as determined by MGM China’s leverage ratio and will mature in May 2024. At December 31, 2020, $770 million was drawn on the MGM China credit facility and the weighted average interest rate was 2.98%. The MGM China credit facility contains customary representations and warranties, events of default, and positive, negative and financial covenants, including that MGM China maintains compliance with a maximum leverage ratio and a minimum interest coverage ratio. Due to the impact of COVID-19, in April 2020, MGM China entered into an amendment of its credit agreement which provided for a waiver of its maximum leverage ratio extending through the second quarter of 2021, and a waiver of its minimum interest coverage ratio from the second quarter of 2020 through the second quarter of 2021. In October 2020, MGM China further amended its credit agreement to provide for a waiver of its maximum leverage ratio and its minimum interest coverage ratio through the fourth quarter of 2021. MGM China was in compliance with its applicable MGM China credit facility covenants at December 31, 2020. In February 2021, MGM China further amended its credit agreement to provide for a waiver of its maximum leverage ratio and its minimum interest coverage ratio through the fourth quarter of 2022. MGM China second credit facility. In May 2020, MGM China entered into a second credit facility, which consisted of a $300 million unsecured revolving credit facility with an option to increase the amount of the facility up to $500 million, subject to certain conditions. In June 2020, MGM China increased the amount of the second revolving credit facility by $100 million to $400 million. The MGM China second credit facility bears interest at a fluctuating rate per annum based on HIBOR plus 1.625% to 2.75%, as determined by MGM China’s leverage ratio. Draws will be subject to satisfaction of certain conditions precedent, including evidence that the MGM China credit facility has been fully drawn. At December 31, 2020, no amounts were drawn on the MGM China second credit facility. The MGM China second credit facility contains customary representations and warranties, events of default, and positive, negative and financial covenants, including that MGM China maintains compliance with a maximum leverage ratio and a minimum interest coverage ratio beginning in the third quarter of 2021. Due to the impact of COVID-19, MGM China entered into an amendment of its second credit facility in October 2020 which provided for a waiver of its maximum leverage ratio and its minimum interest coverage ratio through the fourth quarter of 2021. MGM China was in compliance with its applicable MGM China second credit facility covenants at December 31, 2020. In February 2021, MGM China further amended its second credit facility agreement to provide for a waiver of its maximum leverage ratio and its minimum interest coverage ratio through the fourth quarter of 2022. Bridge Facility. In connection with the Empire City transaction in January 2019, the Company borrowed $246 million under a bridge facility, which was subsequently assumed by the Operating Partnership. The Operating Partnership repaid the bridge facility with a combination of cash on hand and a draw on its revolving credit facility, which was subsequently repaid with proceeds from its offering of its 5.75% senior notes due 2027, discussed below. Senior Notes. In October 2020, the Company issued $750 million in aggregate principal amount of 4.75% senior notes due 2028. In May 2020, the Company issued $750 million in aggregate principal amount of 6.75% senior notes due 2025. In March 2020, the Company completed cash tender offers for an aggregate amount of $750 million of its senior notes, comprised of $325 million principal amount of its outstanding 5.75% senior notes due 2025, $100 million principal amount of its outstanding 4.625% senior notes due 2026, and $325 million principal amount of its outstanding 5.5% senior notes due 2027. As a result, the Company incurred a $105 million loss on early retirement of debt recorded in “Other, net” in the consolidated statements of operations. In December 2019, the Company used a portion of the net proceeds from the Bellagio transaction to redeem for cash all $267 million principal amount of its outstanding 5.250% senior notes due 2020, all $361 million principal amount of its outstanding 6.750% senior notes due 2020, and all $1.25 billion principal amount of its outstanding 6.625% senior notes due 2021. The Company incurred a $171 million loss on the early retirement of such notes recorded in “Other, net” in the consolidated statements of operations. In April 2019, the Company issued $1.0 billion in aggregate principal amount of 5.50% senior notes due 2027. The Company primarily used the net proceeds from the offering to fund the purchase of $639 million in aggregate principal amount of its outstanding 6.75% senior notes due 2020 and $233 million in aggregate principal amount of its outstanding 5.25% senior notes due 2020 through cash tender offers. In February 2019, the Company repaid its $850 million 8.625% senior notes due 2019. Operating Partnership senior notes. In November 2020, the Operating Partnership issued $750 million in aggregate principal amount of 3.875% senior notes due 2029. In June 2020, the Operating Partnership issued $800 million in aggregate principal amount of 4.625% senior notes due 2025. In January 2019, the Operating Partnership issued $750 million in aggregate principal amount of 5.75% senior notes due 2027. Each series of the Operating Partnership's senior notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by all of the Operating Partnership’s subsidiaries that guarantee the Operating Partnership’s credit facilities, other than MGP Finance Co-Issuer, Inc., which is a co-issuer of the senior notes. The Operating Partnership may redeem all or part of the senior notes at a redemption price equal to 100% of the principal amount of the senior notes plus, to the extent the Operating Partnership is redeeming senior notes prior to the date that is three months prior to their maturity date, an applicable make whole premium, plus, in each case, accrued and unpaid interest. The indentures governing the senior notes contain customary covenants and events of default. These covenants are subject to a number of important exceptions and qualifications set forth in the applicable indentures governing the senior notes, including, with respect to the restricted payments covenants, the ability to make unlimited restricted payments to maintain the REIT status of MGP. MGM China senior notes. In June 2020, MGM China issued $500 million in aggregate principal amount of 5.25% senior notes due 2025. In May 2019, MGM China issued $750 million in aggregate principal amount of 5.375% senior notes due 2024 and $750 million in aggregate principal amount of 5.875% senior notes due 2026. The Company primarily used the net proceeds from the offering to pay down outstanding borrowings under the MGM China credit facility, as discussed above. MGM China incurred a $16 million loss on the debt retirement recorded in “Other, net” in the consolidated statements of operations. Maturities of long-term debt. The maturities of the principal amount of the Company’s long-term debt as of December 31, 2020 are as follows:
Years ending December 31, |  |  |  | (In thousands) |
2021 |  |  |  | $ | — |
2022 |  |  |  |  | 1,000,000 |
2023 |  |  |  |  | 1,260,000 |
2024 |  |  |  |  | 2,570,034 |
2025 |  |  |  |  | 2,725,000 |
Thereafter |  |  |  |  | 4,925,552 |
|  |  |  | $ | 12,480,586 |
Fair value of long-term debt. The estimated fair value of the Company’s long-term debt was $13.2 billion and $12.1 billion at December 31, 2020 and 2019, respectively. Fair value was estimated using quoted market prices for the Company’s senior notes and credit facilities.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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