Majority owned by billionaire Kirk Kerkorian, the locally headquartered casino operator is working to pay down its $14 billion of debt that has had it struggling to maintain the leverage ratios required by its creditors. The company recently solved legal and financial issues with its CityCenter development to keep the $9-billion project on track toward a phased opening late this year but still needs to lower its own debt level in order to avoid bankruptcy itself. Further amendments to its debt covenants announced Wednesday delay that possibility.

MGM Mirage plans to use part of the proceeds from both offerings to repay at least $750 million that is outstanding under its senior credit facility and buy back $1 billion in bonds associated with itself and Mandalay Bay Resort Group. The company is also issuing $1.5 billion in senior notes secured by the Bellagio and Mirage resorts, causing some to speculate that the Mandalay Bay could be sold.

"We find it intriguing that the company's ($1.5 billion) private placement issue of secured notes be secured by a first-priority lien on substantially all of the assets of Bellagio and The Mirage, while Mandalay Bay remains unsecured" analyst Joel Simkins of Macquarie Securities said in a note to clients. "In our view, should (MGM Mirage) decide to sell further Las Vegas assets, we believe Mandalay remains the likely 'sacrificial lamb'. We note that Penn National has expressed interest in this asset, and in our view, this property could make for a good strategic fit for the company."

News of the 81-million-share offering sent MGM Mirage stock lower Wednesday due to the dilution of the stock. Kerkorian, who through Tracinda Corp. currently holds 53.8% of the MGM stock, was expected to purchase 10% of the offering. Overallotments to underwriters could result in the sale of an additional 21 million shares.

The bond buyback is for those due this July and October. Bondholders will receive a bonus payment for tendering shares before May 27. The cash tender offer is 100% for early tenders and 97% for tenders between May 27 and June 10. The company is also buying back notes due in 2017 and will use the remainder of proceeds.

Shares of MGM Mirage fell 30% ($3.70) on Wednesday to close at $8.70. In noontime trading Thursday, shares were trading at $7.90, with its low-high for the day being $7.25-$8.80.