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MGM Mirage cancels debt swap after participation falls short
Thursday, Oct. 1, 2009 | 9:48 a.m.
MGM Mirage today canceled a previously-modified debt-exchange offer due to lack of investor participation.
MGM Mirage announced Aug. 27 a plan to trade some of its $782 million in 8.5 percent notes due in 2010 for up to $500 million in 10 percent notes due in 2016.
The deal was later revised downward to $25 million of new notes to be issued after some analysts recommended investors reject the swap.
As of Wednesday, just $9.12 million of existing notes had been tendered, which if accepted would have been swapped for about $10.72 million of new notes. That didn't meet the threshold under the revised terms of $25 million in new notes to be issued.
Instead of the note-swap, MGM Mirage on Sept. 17 executed a liquidity-improving plan by issuing $475 million of senior unsecured notes due in 2018.
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Finally, investors apparently to don't this debt policy any longer. Making new debt to pay back old debt, plus some higher interest...in order to make new debt when this new debt will get due, this downward spiral can't convince the investors any longer. This time it takes more than a debt-exchange to raise liquidity. I also start to believe that the CityCenter will be the ultimate titanic collaps for the company. Unless a miracle happens. I have doubt that the rich investors from Saudi Arabia will throw in more billions to keep the titanic above water. And the public investors obviously don't do it , either.
From Switzerland
Not good for MGM.. Ouch, just as City Center completes the bond holder say NOW is a good time to pay us back.
Funny how a few weeks back we talked about how only the fools would go for the debt swap. To those who run Harrahs and MGM let me just say that the fool pool is running dry. Maybe you can make it up by continuing to change/decrease the odds at the games. That should bring in more customers. Must be the biggest conference room full of group-think people in Vegas...
Right on, lightfoot, the lack of originality amongst hotel and casino executives is downright comic. Everyone copying and mimicking everyone else, year after year, on the way up and on the way down. Monkey see, monkey implement!
It will go back to the roots. People don't want no circus Vegas, they don't need a pyramid or an ancient castle. No matter how big the artificial "lago di como" in front of the Bellagio may be, it's still the inside off the Bellagio that's so fascinating to the visitors. The fountain show outside may be nice, but it's something for 5 or 10 minutes. It's the hours the tourist spends inside of Bellagio, and gambles...
These tourists and locals alike want action. The family-go-to-vegas theory doesn't bring the money to the casinos. And it's not entertaining, either. If families want fun with their kids, they're better of to Disney Land in Anaheim and all the amusment parks all over the country. Gamblers go to Vegas for gambling and taking some sun in the morning and wolfing in the good and inexpensive buffet. That's the idea behind Vegas. And good gaming, this means: Fair rake at the poker tables, good videopoker, and great rules on B-J. That's all that counts. Perhaps a good show , and clean and QUIET hotel rooms. sound proof would be good. Some casinos believe they have to built them the opposite around so people don't need a specific wake up call to get up at 6.30 a.m. Dead wrong!!! Even players need a few hours to rest after the stress on the gaming floor.
From Switzerland
I have a name for a new casino in Vegas: The Classic. That's Vegas, how it used to be...and will be in future. I am sure it will be a success story from the beginning.
ATVDAD1, I also like it better in downtown and on the locals places, such as South Point, M-Resort, Orleans, Santa Fe, East Side Cannery, etc. They are greater places than the overpriced Strip casinos that look impressive, but in reality, aren't impressive at all.
In downtown, the top favorite hotel is clearly the El Cortez. It did a great job by removing some of their slot machines and keeping the comp value up. Amazing, and the rooms are good, too. Nothing to complain. i don't need to stay at the MGM Grand and be surrounded by noise and sreaming tourists on my way to the pool or buffet. These old style casinos have a special charme that you can't get when you spend your days on the Strip.
Greetings from Switzerland
All of you are right I do not live in nevada but I have visited LV 3xs/yr for the last 10 years and just love the place. However, I view gambling as entertainment while I am there. However, the rules have changed so much because of the mistakes in the board room of these hotels, there is no chance for anyone (large and small players) to even win a little. They want it all and people will certainly not keep coming back for more and thats what keeps vegas in business.
Hey ATVDAD1
I think you are exactly right. For years I always stayed at the Sahara where I could drink, eat and stay for next to nothing and drop my cash on the gambling. To be honest I lost most of the time but I had a blast doing it. I didn't feel taken since my stay was so cheap. Last year I stayed at the Mandalay Bay and all of my money went to food, drink and stay. Sure its a really nice property but I had no fun and would not stay there again.
I think the El Cortez is even the better deal than the Sahara or Circus Circus. You get old school Las Vegas with a lot of charme. The barmen can tell you old stories, the center bar has a piano player and in the coffee shop in the morning,I can often see one of the executives walking by and saying hello to everyone. This doesn't happen too often at other places for the masses, and that's why from my point of view the El Cortez is probably the one and last escape for the ones that like to get old style Vegas.