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LAS VEGAS-MGM Mirage said Thursday it received a strong early response to its $1.04-billion tender offer for senior notes due later this year. The offer included a $30-per-$1,000 bonus for those who tendered their notes by Wednesday, May 27.

MGM Mirage says investors tendered $882.6 million worth of the notes – 54% ($121.8 million) of the 6.5% notes Mandalay Resort Group, and 93% ($760.8 million) of its 6% notes.

The tender offer was announced on May 13. The bonus offer expired this week. The overall offer expires on June 10. Those who tender between not and the end of the period will receive $970 per $1,000 offered.

Meanwhile, Harrah’s Entertainment, which last month concluded a $5-billion tender offer, on Thursday said it plans to issue $1.37 billion in new debt through Harrah’s Operating Escrow LLC and Harrah’s Escrow Corp. The two subsidiaries will issue 11.25% senior secured notes due 2017 in a private offering the company says is exempt from federal securities registration requirements.

The offering price is 96.25%. Harrah’s intends to use the proceeds to pay down existing, nearer-term debt and for general corporate purposes.

Harrah’s existing debt has been trading at a discount due to uncertainties about its performance. The issuance of new debt by Harrah’s is seen as a way for the company to take advantage of that fact to lower its overall debt burden and interest expense.

Last month, Harrah’s investors tendered $5 billion (58%) of the $8.6 billion of notes in response to a tender offer. In exchange, they received $3.4 billion of new 10% Second-Priority Senior Secured Notes due 2018.If the company’s goal was to push back the maturity dates of its near-term debt, it may not have been successful. Only 20% of the $1.2 billion in notes maturing in 2010-2013 were tendered.

Harrah’s didn’t say in its filing how much the exchanges will reduce its annual interest costs, which are an issue given the cash flow reductions in the casino-resort industry as a result of the recession. The owner of 53 casinos worldwide– including Caesars Palace, Flamingo, Bally’s, Paris and the Rio, all on the Las Vegas Strip–reported total debt of $24.5 billion as of Dec. 31 and said it paid $1.7 billion in interest and other debt expenses last year.

Industry sources have speculated that the tender offer was meant to keep the current owners in control of the company should it have to file for bankruptcy. The company, which posted a $4.3-billion loss for 2008, warned in March that it may not be able to meet its debt payments due to the impact of the recession on its business operations, a situation that would likely result in a Ch. 11 bankruptcy filing.

In February, Harrah’s submitted requests to tap the remaining $740 million of its $2 billion senior secured revolving credit line and suspended matching contributions to employee retirement programs. In January, it delayed the completion and opening of its 660-room addition to Caesars Palace indefinitely.

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