Debt swap in works to give MGM Mirage breathing room

MGM Mirage is asking investors to swap nearly $500 million in debt maturing next year to give the company some financial breathing room.

The gaming company would issue the new 10 percent senior notes maturing in September 2016 for the 8.5 percent notes due September 2010, of which $782 million is outstanding.

Without the exchange, the company would face $1.2 billion in maturing notes next year and another $529.3 million due in 2011.

The company reported $12.4 billion in debt at the end of the second quarter ended June 30.

This is the second time this year the MGM Mirage has tried to alleviate its near-term debt commitments with CityCenter opening in December.

The company sold $2.7 billion in stock and debt in May. It also restructured some loans to remove the risk of bankruptcy.

“This announcement did not come as a surprise as management has been looking to reduce its near-term maturities and maintaining its focus on opening CityCenter later this year,” Deutsche Bank gaming analyst Andrew Zarnett wrote in an investors note.

MGM Mirage closed at $8.64, up 6 cents or 0.7 percent, on the New York Stock Exchange.

The company owns nine casinos on the Strip and is a joint venture partner with Dubai World in CityCenter.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.