DOW JONES NEWSWIRES
MGM Mirage (MGM) will repay $825.6 million in debt under its
senior credit facility following the highly leveraged casino
operator's sale of $1.5 billion in notes and $1.15 billion in
stock.
The company, which is no longer controlled by billionaire
investor Kirk Kerkorian because of dilution from the stock
offering, is struggling to pay down more than $14 billion in debt
and has been considering selling off properties to meet looming
obligations.
The company has also said it will redeem all of the 7.25% senior
debentures of Mirage Resorts Inc. due 2017 and buy back all of its
6% senior notes due this year and Mandalay Resort Group's 6.5%
senior notes.
Chairman and Chief Executive Jim Murren said Tuesday the
completion of the debt and stock offerings marked a "new beginning"
for the company. He added MGM is well-positioned to continue with
the work needed to improve profitability.
Last week, the company boosted its share offering by 77% and
priced the private debt offering - $650 million in five-year notes
and $850 million in eight-year notes. It sold 143 million shares,
and said Tuesday it sold another 21.5 million as part of the
underwriters' option to cover more demand, boosting shares
outstanding nearly 60%.
Numerous companies have announced secondary offerings in recent
weeks to take advantage of the equity-market rebound, and many of
them have ended up boosting the size of their offerings because of
high demand.
According to the company's credit pact, which it amended last
week, MGM had to pay back $750 million in credit-line borrowings,
or more if the offerings' proceeds exceeded $2.5 billion.
MGM's shares were recently down 3.2% at $8.46. Despite a rebound
in the last 2 1/2 months, the stock is still off 84% in the last
year.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com