[IMGCAP(1)]LAS VEGAS-MGM Mirage is feeling a bit more stable after recently completing a big capital raise and successfully gaining relief from the financial covenants associated with its senior credit facility. Indeed, the operator of 10 casinos on the Las Vegas Strip said last week it can now fulfill its financial commitments through 2010, including $1.26 billion of permanent repayments of credit facility borrowings and any amounts owed under the CityCenter completion guarantee. Its accountants at Deloitte & Touche now agree, having removed language from its audits questioning the company’s ability to continue as a going concern.

[IMGCAP(2)]The only hurdle now in question, MGM Mirage says, is its ability to redeem its $782 million. 8.5% senior notes maturing in September 2010. Clearing that obstacle depends in part on its operating performance and no downside surprises related to the CityCenter completion guarantee. Should things not go according to plan–entirely possible, if not likely, given the recession–”it may be necessary for us to seek additional financing or explore the sale of non-core assets to satisfy the September 2010 senior note maturity.” In March, MGM Mirage sold Treasure Island to Phil Ruffin for $755 million.

Station Casinos’ future remains up in the air and its $5.7-billion debt load is weighing heavy. The locally headquartered operator of more than a dozen off-Strip casinos hasn’t been making interest payments on its debt and is seeking yet another forbearance agreement to complement the one that has already expired while it awaits word on whether bondholders are amenable to the pre-packaged bankruptcy plan it filed in February.

Last week, it sought another month of forbearance from the holders of a majority of its senior and senior subordinated notes and the lenders holding a majority of the commitments under its credit agreement. “The lenders currently are seeking requisite approval for the extension of the forbearance agreements, which have expired,” the company said in a statement.

The pre-packaged bankruptcy was offered up in February by Station Casinos and some of its lenders. It would pay investors 10 cents to 50 cents on the dollar in secured notes and cash in exchange for some $2.3 billion of existing bonds. Affiliates of the ownership, the Fertitta family and Colony Capital, have agreed to put up as much as $244 million in new capital to maintain their current interests in the company, according to Station Casinos.

Also in February, Boyd Gaming made a non-binding $950-million offer for several of Station’s casino properties, saying it “would present a superior recovery to the unsecured creditors of Station versus the current Exchange Offer.”"On March 2, concurrent with receiving the first of many forbearance agreements, Station Casinos shot down the offer.

The company lost $33.7 million in the first quarter, less than half of what it lost in the same year-earlier period, due mostly to a $40.3-million gain on the early retirement of debt, not improved property performance. Average occupancy fell 300 basis points year-over-year to 85% while the average daily room rate fell 26% to $71 from $98. Net revenue fell 20% to $282.7 million. Revenue from gaming, hotel rooms, and food and beverage sales all declined, according to the SEC filing. Operating revenue fell by more than half, to $27.7 million from $59.9 million.

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