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LAS VEGAS-MGM said Thursday it is evaluating how much value it has lost with regard to its 50% stake in CityCenter, the company’s $9-billion, 18-million-square-foot development joint venture with Dubai World on the Las Vegas Strip. The casino operator said it expects to incur impairment charges in the third quarter and subsequent quarters but gave no hint as to the amount.

While it found no reason to write down its investment in the first quarter MGM says it expects to conduct a new impairment analysis [and] “believes it is reasonably likely that the outcome of this review may lead to a non-cash impairment charge…,” the company states in an 8-K filed Thursday. The company said it also expects to incur an additional non-cash impairment charge for lost value in the 2,400 condominium and condo-hotel units being built at CityCenter, the market value of which is now much lower than MGM Mirage had planned.

“It is reasonably likely that the fair value less cost to sell of the residential inventory at completion will be below the inventory’s carrying value,” the company writes. Some impairment charges will be taken in the third quarter while other will be taken others upon completion of the residential units, likely in the fourth quarter or the first quarter of next year, it said.

Also this week, MGM Mirage gave up on trying to entice investors into participating in its outstanding 2010 note-exchange. The company late last month offered to trade a portion of its $782 million in 8.5% notes due in 2010 for up to $500 million of 10 percent notes due in 2016. Last week, with just $21 million of the 8.5% notes having been tendered, the company upped the offer, offering to give investors $1,175 of principal in the new notes for each $1,000 of the old notes that were tendered.

This week, having generated little new interest, MGM capped the debt exchange, warned the holders of already tendered notes that the notes will have limited liquidity and extended the deadline so they could withdraw their tenders up until the end of the month.

“An issue of securities with a small outstanding principal amount available for trading, or float, generally commands a lower price than does a comparable issue of securities with a greater float. Therefore, the market price for new notes may be adversely affected by the relatively small float,” the company said in a regulatory filing. “A reduced float may also make the trading prices of new notes more volatile.”

MGM Mirage also said Thursday that it plans to make a private placement of $350 million of senior unsecured notes due 2018. Additional details were not provided.

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