The offering follows an agreement that MGM struck with its lenders in February. The agreement included about half a dozen major provisions requiring MGM to reduce its debt to certain lenders, restructure its finances, extend the maturity date for some of its loans and repay approximately $1.2 billion owed to lenders who have not agreed to extend the maturities on their loans.
Among other things, the February agreement and the $845-million offering extend a significant portion of MGM Mirage's credit lines to a February 2014 maturity. Jim Murren, chairman and CEO of MGM Mirage, called the closing of the $845 million offering, "a re-affirmation of our bank partners' commitments and their long-term view of our prospects."
The $845 million in new notes are secured by a mortgage on MGM Grand Las Vegas and substantially all existing and future property of MGM Grand Hotel LLC. MGM owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in five other properties in Nevada, New Jersey, Illinois and Macau. One of those investments, the newly opened CityCenter, is also managed by MGM Mirage.
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