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LAS VEGAS-MGM Mirage said Monday it has closed on $1.8 billion of the $3 billion in financing it is seeking to complete Citycenter, an $11.3-billion, 19 million-sf development rising all at once on the Las Vegas Strip. The project, a 50-50 partnership of MGM Mirage and Dubai World, has been under construction since 2006 and is scheduled to open to the public at the end of 2009.

The facility, which matures in April 2013, is expected to be increased to $3 billion as additional commitments are received. The duo has received additional signed commitment letters totaling approximately $500 million and will seek the remaining commitment amounts through a syndication process. MGM Mirage CFO Dan D’Arrigo said Monday the partnership is receiving “strong interest” in the syndication process, which is set to launch tomorrow, Oct. 7, 2008.

“MGM’s strong balance sheet and long track record of superior financial performance combined with the substantial financial resources of our partner uniquely position Citycenter in an obviously difficult credit market,” he added.

As is, the credit facility consists of a $250 million revolver with the remaining amount being in the form of term loans and is secured by substantially all of the assets of Citycenter. The facility, based on commitments made backs in August, is initially priced at LIBOR plus 3.75% through the construction period. The facility is being led by Bank of America, Royal Bank of Scotland, UBS, BNP Paribas, and Sumitomo Mitsui. Other current participants include Deutsche Bank, Morgan Stanley, and the Bank of Nova Scotia.

Robert Baldwin, MGM Mirage chief design and construction officer, told analysts recently that once the full financing is in place the JV will have spent approximately $4.2 billion of the estimated $9.1 billion of gross cash construction and preopening costs, leaving approximately $5 billion needed to complete construction. Minus the $3 billion in bank financing, that leaves an additional $2 billion in costs that will be split evenly between MGM Mirage and Dubai World. If it cannot obtain the remaining $700 million of commitments, MGM Mirage and Dubai World would have to put in more.

The actual gross cost of Citycenter is $11.2 billion. In its first quarter report, MGM Mirage pegged the net project budget at $8.5 million–after an expected $2.7 billion in residential sales. The gross project budget includes $9.2 billion for construction costs (now $9.3 billion including capitalized interest), $1.7 billion for the land, $200 million for pre-opening expenses and $100 million of “intangible assets.” As of August, Baldwin said 54% or 1,421 of the 2,700 condominiums have been sold for $1.75 billion.

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