CityCenter Holdings, owner of the joint-venture Las Vegas casino complex between MGM Resorts International (MGM) and Dubai World, is slated to sell $1.1 billion in notes Thursday, including $600 million of pay-in-kind notes--risky debt that can pay interest in the form of more debt.

Price guidance for the two-part offering has a $500 million tranche of five-year first-lien notes yielding in the area of 7.75%, according to a person familiar with the deal. Guidance for the $600 million tranche of six-year second-lien notes is in the area of 10.75%-11% if interest on the notes is paid in cash, and steps up by 75 basis points if the notes are paid in kind with additional debt.

The five-year notes are rated B2 by Moody's Investors Service and B by Standard & Poor's, while the six-year notes are rated Caa2 and CCC, respectively, deep in speculative-grade--or junk--territory.

Proceeds from the note sale will go toward paying down the project's existing bank credit facility as part of an amend-and-extend transaction that will extend the maturity of the remaining loans for four years. The move is the latest by the troubled co-owners of the $8.7 billion project to improve CityCenter's financial standing.

The notes are expected to price later Thursday via joint bookrunners Barclays, Bank of America Merrill Lynch and RBS.

-By Michael Aneiro; Dow Jones Newswires; (212) 416-2203; michael.aneiro@dowjones.com
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