Parties encounter delay in CityCenter financing

MGM Mirage Inc. and partner Dubai World have run into delays in securing more than $3 billion in financing for a $9.2 billion Strip casino project, but expect a deal to be done in the coming weeks, an MGM Mirage executive said Tuesday.

MGM Mirage chief financial officer Dan D'Arrigo told The Associated Press that he expects no delays for the construction and planned late 2009 opening of the mixed-use CityCenter complex.

"I don't think it's any surprise to anyone that the financial markets are not what they once were," D'Arrigo said. "The credit crunch is real, and it's one that we -- like any other company out there looking to raise capital -- have to deal with."

D'Arrigo said MGM Mirage had told investors it hoped to complete project financing by June or July, but said banks are much more guarded with capital commitments given the U.S. economy.

"A lot of banks are not looking to use their balance sheets right now if they don't need to and would rather preserve capital," D'Arrigo said.

He said the company has talked to about a dozen banks about the loan package; about half have committed to it.

Moody's Investors Service, a financial research company that rates the credit of commercial borrowers, announced earlier this month that MGM Mirage's ratings were on review for a possible downgrade, in part because of the uncertainty of CityCenter's financing.

The review was part of a series of moves affecting Moody's ratings of several casino companies that operate in Las Vegas, driven by declining gambling revenue.

CityCenter -- which MGM Mirage officials have called the most expensive private commercial development in U.S. history -- is expected to include six high-rise towers with a 4,000-room hotel-casino, condominiums, boutique hotels and a retail, dining and entertainment complex.