MGM Mirage amends credit facility
by Wally Northway
Published: February 8,2010
LAS VEGAS — MGM Mirage is seeking amendments to its aggregate $5.55 billion of senior credit facilities, which would extend the maturity of a substantial portion of those credit facilities from Oct. 3, 2011, to Feb. 21, 2014.
The company has asked its lenders to provide their final approvals of the transaction by Feb. 24.
Lenders approving the proposed amendments would receive prepayments aggregating not less than 20 percent of their outstanding loans and lending commitments, as well as certain additional interest and fees. The prepayments would increase by 1 percent for each full percentage by which lender participation in the transaction exceeds 80 percent, to a maximum of 25 percent.
“We are pleased to have received strong initial support from our leading lenders for this proposed transaction, and are now working with the rest of our lender syndicate to achieve maximum participation,” said Dan D’Arrigo, executive vice president and CFO of MGM Mirage, which has gaming operations in Mississippi. “These amendments would extend a significant portion of our credit facilities, and enhance our debt maturity profile.”
Lenders approving the extension would receive an increase of 100 basis points to their interest rates, as well as amendment and extension fees totaling 75 basis points times their reduced exposures. The credit facilities would also be re-tranched in a manner that would result in conversion of $1.4 billion of revolving loans and commitments into term loans. The transaction would include covenant and other amendments, and would permit MGM Mirage to issue additional secured indebtedness as permitted under the company’s public debt indentures.
In connection with the proposed amendment, MGM Mirage also provided an update concerning its discussions with the New Jersey Division of Gaming Enforcement (DGE) about the DGE’s May 2009 recommendation to the New Jersey Casino Control Commission (CCC) that MGM Mirage’s joint venture partner in Macau be found unsuitable. MGM Mirage stated that it is currently involved in constructive settlement discussions with the DGE, which have centered on the company placing its 50 percent ownership interest in the Borgata Hotel Casino & Spa and related leased land in Atlantic City into a divestiture trust for which MGM Mirage would be the sole economic beneficiary. While no definitive settlement with the DGE has been reached, the company has asked its lenders to consent to the trust arrangement. Any settlement is subject to both DGE and CCC approval.
“We disagree with the New Jersey Division of Gaming Enforcement’s recommendation to the Casino Control Commission concerning our Macau partner, but believe pursuing a settlement with the DGE represents the best course of action for our company and its shareholders,” said Jim Murren, chairman and CEO. “We would like to put this matter behind us and move forward with the compelling growth opportunities we have in Macau.”
To sign up for Mississippi Business Daily Updates, click here.
2 Responses to “MGM Mirage amends credit facility”
Top Posts & Pages
- Omega Protein shifting vessels to Mississippi
- PSC unanimously rejects Entergy-ITC proposed merger
- Bankrupt Simply Wheelz chooses prevailing bidder for assets
- IKE TROTTER: There are primary changes in Social Security for 2014
- Company mulling plan to build new pipeline
- CARTOON — Nobile illustrates Thad Cochran's most significant advantage over the competition
- Conservator: Schools had too many employees
- Judge denies ex-mayor's motion to vacate Katrina-related conviction
- Wiseman retiring after nearly 30 years with Stennis Institute