Shaky credit markets have prompted Las Vegas' MGM Mirage to
bargain with lenders to change the terms of a $7 billion loan agreement. The changes increase the maximum total leverage ratio, modifies pricing levels and certain definitions and limitations on secured indebtedness. The AP reported
the move gives some breathing room to the hotel and casino operator, which said it had a strong balance sheet and isn't in danger of breaching loan requirements.
MGM also announced that CityCenter, a joint venture project with state-owned investment fund Dubai World, completed the first phase of its $3 billion financing package by securing a $1.8 billion senior bank credit facility, which matures in April 2013. The AP report noted the $9.3 billion Vegas casino project didn't get as much initial funding as expected.
Reuters notes
casino stocks been under pressure
over the past year as higher fuel prices and the subprime mortgage
crisis have sapped consumer spending at the same time travel and
financing costs have risen.
As markets fell worldwide, MGM Mirage shares were down almost 10% to $19, way off a 52-week high of $100.50. Shares were still sinking in after hours trading.
Billionaire investor Kirk Kerkorian's Tracinda Corp. is the majority owner of MGM Mirage. -
Baz HiralalGo to the story from the AP
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Cuong Viet Do
And the winners are...
The MGM sure has come a long way from just gambling. If tehy can make deals like this, why not work with the U.S. government who could use some help