MGM Osaka Financing Secures Historic Multibillion-Dollar Loan in Japan

This week, MGM Osaka’s development group secured the final financing elements to make the integrated casino resort a reality.
MGM Resorts International and Orix Corporation have finalized their financing strategy for MGM Osaka, a $8 billion-plus development project on Yumeshima Island.

This week, partners secured the final $3.42 billion in funding needed to complete the project, which is scheduled to open in 2030.
MGM Osaka is a more than $8 billion development project on Yumeshima Island , a nearly 700-acre man-made landmass.

The integrated casino resort will occupy approximately 52 acres.
MGM Resorts International and Orix Corporation, a global financial services conglomerate headquartered in Tokyo, are equal partners at 42.5%.

The remaining 15% stake is controlled by several Japanese companies, including Panasonic, Kansai Electric and West Japan Railway.
Japanese media outlet Nikkei reported Wednesday that MGM and Orix had secured 530 billion yen (US$3.42 billion) in loans from two Japan-based banks.

The lenders are Mitsubishi UFJ Financial and Sumitomo Mitsui Bank.
Mitsubishi Financial is a subsidiary of Mitsubishi Group, a private conglomerate best known in the United States for electronics and automobiles.

The company’s finance division is one of the world’s largest lenders and holding companies.
The latest round of financing completes the company’s 1.27 billion yen (US$8.2 billion) financing plan for MGM Osaka.

historic financial contract

MGM Osaka’s $8.2 billion financing structure represents the richest co-financing deal involving multiple banks in Japanese history, according to multiple news reports in Japan.
Construction on the project is expected to take more than five years, and MGM officials tentatively plan to open the destination in 2030.

MGM Osaka is the only casino project underway in Japan.
When Japan approved up to three casinos in 2018, it caught the attention of the world’s major casino developers and operators.

But the country’s tedious regulatory path has caused most folding in the Land of the Rising Sun.
MGM remained firm in its commitment to becoming Japan’s first casino operator.

The Osaka Project will be unlike any other in the company’s history.
Yumeshima presents MGM with unprecedented construction challenges.

Site preparation costs were $173 million because workers had to install steel beams that extended 230 feet down to reach bedrock.
With the land secured and preparations for construction of the large-scale resort, MGM broke ground on development in December.

The plan includes 2,500 hotel rooms, 400,000 square feet of convention space and a variety of attractions “showcasing the best of Osaka and Japan.”
The casino floor is limited to 3% of the resort’s total indoor floor area.

weak yen

The Japanese yen on Wednesday fell to its weakest level against the U.S. dollar since 1990.
The U.S. dollar is currently worth about 155 yen, which only helps MGM finance its projects in Japan.

A strong dollar plays well into MGM’s hands as the U.S.-토토사이트 company is partially funding its Japanese push through cash reserves and secured U.S. financing.
MGM’s overall project costs are falling due to the weak yen.

When current government officials selected MGM’s Osaka venue, the price tag for the integrated resort was estimated at around $10 billion.
But with the yen falling nearly 30% against the U.S. dollar over the past five years, costs have fallen by about $1.8 billion.