MGM expands debt-placement deal with $475 million in notes

By Las Vegas Sun Staff (contact)

Friday, Sept. 18, 2009 | 9:01 a.m.

MGM Mirage's latest Wall Street debt-placement deal resulted in pricing of an offering of $475 million of senior unsecured notes due in 2018.

The company on Thursday said it intended to make a private placement of $350 million of unsecured notes due 2018.

Reuters reported the deal was expanded to $475 million and MGM Mirage today said the bonds carry an interest rate of 11.375 percent.

The transaction is expected to close Tuesday.

"The net proceeds of the offering will be used to reduce the outstanding borrowings under the company’s senior credit facility and for general corporate purposes," said MGM Mirage, which has been working to improve liquidity by extending debt maturities.

Separately, the company on Thursday responded to two Sept. 14 shareholder derivative lawsuits against its directors alleging breach of fiduciary duty and other claims related to the decline in the company's stock price from late 2007 through this winter.

"The company believes that the allegations set forth in these aforementioned complaints are without merit. The company will vigorously defend against these claims but there can be no assurance that the outcome of the proceedings will not have a material adverse effect on the company," MGM Mirage said in a regulatory filing.

The company earlier used the same language in responding to a separate Aug. 19 shareholder lawsuit seeking class-action status against the company and certain officers and directors.