DOW JONES NEWSWIRES
MGM Mirage (MGM) plans to swap up to a half a billion dollars in
notes in an exchange that would give the debt-laden company some
much-needed breathing room.
Shares of MGM slipped 3 cents to $8.61 in after-hours trading.
They have climbed nearly 20% over the past three months.
Under the deal, the casino operator would swap 8.5% senior notes
due in 2010, of which $782 million in principal is outstanding, for
up to $500 million of 10% senior notes due in 2016.
Earlier this month, MGM reported it swung to a second-quarter
loss amid charges and falling revenue. The debt-laden casino giant
said at the time that demand is still down, but it has seen some
signs of a pickup in bookings.
The company has been struggling to remain in compliance with its
debt covenants and has been considering selling off properties to
meet looming obligations. In May, it said it would pay back $825.6
million in debt under its senior credit facility after a stock and
bond offering. Those offerings led the company to remove a
bankruptcy concern statement from a filing in June, saying there is
no longer "substantial doubt" about its ability to remain
operational.
The casino operator said Thursday the exchange offer will expire
Sept. 24. For each $1,000 in principal amount validly tendered and
accepted, the holder will receive $1,175 principal amount of new
notes, of which $50 in principal amount will be paid to early
participants who tender existing notes before 5 p.m. EDT on Sept.
10. Holders who tender notes after Sept. 10 won't receive the early
participation payment.
Tenders of existing notes in the exchange may be validly
withdrawn anytime before 5 p.m. EDT on Sept. 10.
-By Shara Tibken, Dow Jones Newswires; 212-416-2189;
shara.tibken@dowjones.com;