Rating Action: Moody’s affirms CityCenter’s B2 CFR, outlook remains negative; SGL downgraded to SGL-3Global Credit Research – 24 Mar 2021New York, March 24, 2021 — Moody’s Investors Service affirmed CityCenter Holdings, LLC’s (“CityCenter”) B2 Corporate Family Rating (“CFR”) and B2-PD Probability of Default Rating, as well as the company’s B2 rated senior secured revolver and term loan B. The company’s Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-2. The outlook remains negative.Moody’s affirmed the B2 CFR because CityCenter has adequate liquidity to manage through temporary operating weakness related to the coronavirus. Moody’s expects visitation and earnings to improve over the next year, and that debt-to-EBITDA leverage will decline to below 6.0x in 2022.Moody’s downgraded the speculative-grade liquidity rating to SGL-3 from SGL-2 because of reduced earnings and free cash flow and the company’s revolving credit facility that matures in April 2022. As of the year ended December 31, 2020, CityCenter had cash of $97 million and an undrawn $125 million revolving credit facility. Moody’s estimates the company will maintain sufficient internal cash sources after maintenance capital expenditures to meet required annual term loan amortization and interest requirements over the next twelve months as the business continues to recover. However, the loss of a revolver would reduce the company’s financial flexibility to manage in a downturn. Eliminating or reducing the company’s distributions ($101 million in 2020) to joint venture partners would reduce cash needs and Moody’s does not anticipate a dividend payment in 2021. The company’s revolving credit facility matures in April 2022 and term loan is due in 2024.Downgrades:..Issuer: CityCenter Holdings, LLC…. Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2Affirmations:..Issuer: CityCenter Holdings, LLC…. Probability of Default Rating, Affirmed B2-PD…. Corporate Family Rating, Affirmed B2….Senior Secured Bank Credit Facility, Affirmed B2 (LGD4)Outlook Actions:..Issuer: CityCenter Holdings, LLC….Outlook, Remains NegativeRATINGS RATIONALECityCenter’s B2 CFR reflects the meaningful earnings decline from efforts to contain the coronavirus and the slow recovery as the properties have reopened. The rating also reflects geographic and property concentration risk as all the company’s revenue and earnings are derived from one resort complex located on the Las Vegas Strip. CityCenter remains exposed to reduced visitor volumes, convention attendance and low occupancy levels. Supporting the credit profile is CityCenter’s lower leverage and higher interest coverage relative to comparably rated industry peers as of year-end 2019 and operating cash flow that normally exceeds its capital spending, mandatory debt amortization and dividend needs. CityCenter’s EBITDA remained meaningfully below pre-pandemic levels once properties reopened in July but this was sufficient to meaningfully reduce the cash burn. Moody’s projects that EBITDA in 2021 will remain roughly 50-55% below 2019 levels because convention business and travel to Las Vegas will only recover slowly. The earnings should be sufficient to restore positive free cash flow, but the uncertain economic environment and willingness of individuals and companies to travel creates wide potential variation around operating results. Moody’s expects that excess cash will be distributed to shareholders from time to time during normal economic conditions, and that the company currently has adequate liquidity.The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody’s analysis has considered the effect on the performance of CityCenter from the current weak US economic activity and a gradual recovery for the coming year. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high. Moody’s regards the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in CityCenter’s credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and CityCenter remains vulnerable to the outbreak continuing to spread.CityCenter is exposed to corporate governance risk due to its joint venture ownership and aggressive financial policy that leads to high leverage and distributions to shareholders, which are at times debt financed. However, Moody’s expects the company will preserve liquidity including foregoing dividends to provide flexibility to operate until the currently weak Las Vegas gaming and convention market has recovered more fully from the pandemic.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe negative outlook considers that CityCenter remains vulnerable to travel disruptions and unfavorable sudden shifts in discretionary consumer spending and the uncertainty regarding the pace of recovery of the Las Vegas Strip and the pace at which consumer spending at the company’s properties will recover. These factors could prolong the time period until CityCenter’s earnings recover and sustain elevated leverage.Ratings could be downgraded if liquidity deteriorates or if Moody’s anticipates CityCenter’s earnings decline is more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. If debt-to-EBITDA leverage is sustained over 6.0x the ratings could be downgraded.A ratings upgrade is unlikely given the weak operating environment. However, the ratings could be upgraded if earnings recover such that positive free cash flow and reinvestment flexibility is restored and debt-to-EBITDA is sustained below 5.0x.The principal methodology used in these ratings was Gaming Methodology published in October 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1244702. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.CityCenter Holdings, LLC (CityCenter) owns a mixed-use development on the Las Vegas Strip that opened in 2009. CityCenter is comprised of ARIA Resort & Casino, a 4,004-room casino resort; Vdara Hotel and Spa, a 1,495-room luxury condominium-hotel; and the Veer Towers which contain 669 luxury condominium residences. The company sold the Mandarin Oriental hotel property in August 2018 for $214 million. CityCenter is a 50-50 joint venture between a wholly-owned subsidiary of MGM Resorts International (Ba3 review for downgrade), and Infinity World Development Corp (not rated), which is wholly-owned by Dubai World, a Dubai United Arab Emirates government decree entity. The company reported annual revenue of $523 million the 12-month period ended December 31, 2020.REGULATORY DISCLOSURESFor further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the UK and is endorsed by Moody’s Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Adam McLaren Vice President – Senior Analyst Corporate Finance Group Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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