LAS VEGAS, April 20 /PRNewswire-FirstCall/ -- MGM MIRAGE
(NYSE: MGM) announced today that it has closed the private offering
of $1.15 billion in aggregate
principal amount of its 4.25% convertible senior notes due 2015.
Initial purchasers exercised their option to purchase
$150 million in aggregate principal
amount of additional notes to cover over-allotments, which is
included in the $1.15 billion of
gross proceeds. The Company received approximately
$1.12 billion in net proceeds from
the offering. Net proceeds were used to repay a portion of
the Company's outstanding revolving indebtedness under its senior
credit facility.
"The closing of this transaction is another milestone for our
Company and its shareholders. We received strong investor
demand and the transaction exceeded our expectations. We
believe this capital raise was achieved to the benefit of all of
our stakeholders," said Jim Murren,
Chairman and Chief Executive Officer of MGM MIRAGE.
"We continue to improve the maturity profile of our Company by
accessing the capital markets opportunistically and at attractive
yields," said Dan D'Arrigo, Executive Vice President and Chief
Financial Officer of MGM MIRAGE.
The notes are 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 are
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 approximately 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 are
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 several 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 (approximately 50% above the last reported
sale price of the Company's common stock on the New York Stock
Exchange on April 15, 2010). In
conjunction with this capped call transaction, the Company made a
cap call payment to these initial purchasers of the notes or their
respective affiliates.
The Company has been advised that, in connection with hedging
the capped call transactions, the counterparties or their
affiliates have entered into various derivative transactions with
respect to the Company's common stock and may, from time to time,
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 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. 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