...Regulations Sour Spin-Off Hopes: Fitch Ratings believes the recent IRS guidance and the passage of the Protecting Americans from Tax Hikes Act of 2015 (PATH) will make future REIT spin-offs less likely, as reflected in McDonald's Corp (McDonald's) decision to not pursue a spin-off. The regulation should not, however, derail the corporate issuers' existing plans intended to realize value in their real estate holdings. A handful of issuers are currently pursuing or considering transactions that would not require a private letter ruling (PLR) from the IRS, including MGM Resorts International's (MGM), Pinnacle Entertainment (PNK), Caesars Entertainment Operating Co.'s (CEOC) and Macy's Inc. (Macy's). Transactions Aim for Multiple Arbitrage: The main motivation for REIT spin-offs and similar alternatives is to separate the more valuable real estate from the less valuable, more cyclical operations. MGM, CEOC, and possibly Macy's, are opting for strategies that do not involve spin-offs nor require...
