Majority owned by billionaire Kirk Kerkorian, the locallyheadquartered casino operator is working to pay down its $14billion of debt that has had it struggling to maintain the leverageratios required by its creditors. The company recently solved legaland financial issues with its CityCenter development to keep the$9-billion project on track toward a phased opening late this yearbut still needs to lower its own debt level in order to avoidbankruptcy itself. Further amendments to its debt covenantsannounced Wednesday delay that possibility.

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

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