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MGM Mirage Raises $826 Million - Analyst Blog

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On Wednesday, MGM Mirage (MGM) closed a debt offering and raised approximately $826 million. The company used the proceeds from this offering to fulfill certain requirements for its amended credit facility agreement.
 
The company closed the private offering of $845 million of its 9% senior secured notes due March 2020. This generated net proceeds of $826 million.
 
MGM Mirage used the proceeds for the prepayment of approximately $820 million of loans under its senior credit facility and related fees and expenses. This prepayment helped it to fulfill the requirement for a 20% reduction to the credit exposures of the company's lenders.

Additionally, the prepayment resulted in a re-tranching of the company's senior credit facility pursuant to a restatement of the related agreement. The restated credit facility permits the extension of a significant part of the company’s credit facilities from October 2011 to February 2014.

In a separate development, MGM Mirage announced on Wednesday that the New Jersey Casino Control Commission (CCC) has approved the settlement agreement between the company and the New Jersey Division of Gaming Enforcement (DGE).

Under this agreement, the company will sell its 50% ownership interest in the Borgata Hotel Casino & Spa and related leased land in Atlantic City. The company’s ownership in Borgata comes through a 50-50 joint venture with Boyd Gaming Corporation, whose interest is not affected by the settlement. 

MGM Mirage’s management also said that the DGE's report acknowledged the lack of evidence that Pansy Ho, MGM’s joint venture partner in Macau, has engaged in any wrongdoing or been accused of any illegal activity.

Last month, MGM Mirage reported a fourth-quarter loss of 25 cents per share, worse than the Zacks Consensus Estimate of a loss of 14 cents. Though the cost cut initiatives provided some relief to the bottom line, the company’s earnings continue to be impacted by the economic downturn. The company continued to experience pressure on room rates in Las Vegas that heaved on its margins.

Shares of MGM Mirage were down 35 cents or 2.85% to $11.91 on Thursday.
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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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