MGM Mirage amends loan agreement
MGM Mirage has amended its loan agreement with lenders led by Bank of America to waive covenant defaults and allow it to pay down debt, according to a filing with the Securities and Exchange Commission.
The amendment for the Las Vegas-based operator of casinos permanently waives any prior non-compliance with the company’s total leverage ratio covenant or interest ratio covenant for the quarter ended March 31, according to the filing today. The company wasn’t in compliance with its financial covenants as of March 31, according to a separate filing with the SEC May 12.
As part of the amendment, the company will be required to issue debt and equity of at least $2.5 billion. MGM Mirage completed a $1 billion public stock offering last week. MGM also priced a private offering of $1.5 billion of senior secured notes, and $650 million of 10.375% senior secured notes due May 2014 and $850 million of 11.125% senior secured notes due November 2017, according to a company statement.
The casino company must then repay $750 million of borrowings under its $2.5 billion term loan and $4.5 billion revolver, according to a May 11 filing and today’s filing. In the past 60 days, the company also has repaid an additional $400 million on the $4.5 billion revolver, according to a person familiar with the amendment who declined to be named because the discussions are private. The revolver and term loan both mature in 2011.
The Royal Bank of Scotland PLC, JPMorgan Chase & Co., Citigroup Inc. and Deutsche Bank AG were also involved in the amendment, according to today’s filing.
