LAS VEGAS, April 15 /PRNewswire-FirstCall/ -- MGM MIRAGE
(NYSE: MGM) announced today that it has priced $1.0 billion in aggregate principal amount of its
4.25% convertible senior notes due 2015. The transaction is
expected to close on April 20, 2010,
subject to satisfaction of various customary closing conditions.
The Company has granted to the initial purchasers an option to
purchase up to $150.0 million in
aggregate principal amount of additional notes to cover
over-allotments. The Company plans to use the net proceeds from the
offering to repay a portion of its outstanding revolving
indebtedness under its senior credit facility.
The notes will be general unsecured senior obligations of the
Company, guaranteed by substantially all of the Company's
wholly-owned domestic subsidiaries, which also guarantee the
Company's other senior indebtedness, and equal in right of payment
with, or senior to, all existing or future unsecured indebtedness
of the Company and each guarantor. The notes will pay interest
semi-annually at a rate of 4.25% per annum and mature on
April 15, 2015. The notes will be
convertible at an initial conversion rate of approximately 53.83
shares of the Company's common stock per $1,000 principal amount of the notes,
representing an initial conversion price of approximately
$18.58 per share of the Company's
common stock and a conversion premium of 27.5% based on the last
reported sale price per share of the Company's common stock on the
New York Stock Exchange on April 15,
2010 of $14.57 per share. The
initial conversion rate is subject to adjustment under certain
circumstances. The notes will be convertible into shares of the
Company's common stock at any time prior to the close of business
on the third scheduled trading day immediately preceding the
maturity date of the notes.
In connection with the offering, the Company has entered into
capped call transactions with one or more of the initial purchasers
of the notes or their respective affiliates. The capped call
transactions are expected generally to reduce the potential
dilution to the Company's common stock upon any conversion of notes
in the event that the market value per share of the Company's
common stock, as measured under the terms of the capped call
transactions, is greater than the strike price of the capped call
transactions (which corresponds to the initial conversion price of
the notes and is subject to certain adjustments substantially
similar to those contained in the notes). The capped call
transactions have a cap price equal to approximately $21.86 (50% above the last reported sale price of
the Company's common stock on the New York Stock Exchange on
April 15, 2010). If the initial
purchasers exercise their over-allotment option to purchase
additional notes, the Company may enter into additional capped call
transactions.
The Company has been advised that, in connection with hedging
the capped call transactions, the counterparties or their
affiliates expect to enter into various derivative transactions
with respect to the Company's common stock concurrently with, or
shortly after, the pricing of the notes and may, from time to time
following the pricing of the notes, enter into or unwind various
derivatives and/or purchase or sell the Company's common stock in
secondary market transactions. These activities could increase (or
reduce the size of any decrease in) the price of the Company's
common stock concurrently with or following the pricing of the
notes, and could also cause or avoid an increase or a decrease in
the price of the Company's common stock following any conversion of
notes and during the period prior to the maturity date.
The notes, and any shares of the Company's common stock issuable
upon conversion of the notes, have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any
state securities law and may not be offered or sold in the United States or to any U.S. persons
absent registration under the Securities Act, or pursuant to an
applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. The notes, and any shares of the Company's
common stock issuable upon conversion of the notes, will be offered
only to "qualified institutional buyers" under Rule 144A of the
Securities Act.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the notes or any shares of the
Company's common stock issuable upon conversion of the notes, nor
shall there be any offer, solicitation or sale of any notes, or any
shares of the Company's common stock issuable upon conversion of
the notes, in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
Statements in this release which are not historical facts are
"forward looking" statements and "safe harbor statements" within
the meaning of Section 21E of the U.S. Securities Exchange Act of
1934, as amended, and other related laws that involve risks and/or
uncertainties, including risks and/or uncertainties as described in
the Company's public filings with the Securities and Exchange
Commission. We have based those forward-looking statements on
management's current expectations and assumptions and not on
historical facts. Examples of these statements include, but are not
limited to, statements regarding the Company's expectations to
close on the sale of the notes. These forward-looking statements
involve a number of risks and uncertainties. Among the important
factors that could cause actual results to differ materially from
those indicated in such forward-looking statements include market
conditions for corporate debt and equity generally, for the
securities of gaming, hospitality and entertainment companies and
for the Company's indebtedness and common stock in particular. In
providing forward-looking statements, the Company is not
undertaking any duty or obligation to update these statements
publicly as a result of new information, future events or otherwise
except as required by law.
SOURCE MGM MIRAGE