Las Vegas Sun

March 29, 2024

Asian casino operator invests in MGM Mirage

Asian casino operator Genting Malaysia Bhd. today said it invested again in Las Vegas-based MGM Mirage by buying $18 million of notes -- part of an $845 million debt issuance by MGM Mirage.

Genting, of Kuala Lumpur, said the $18 million in 9 percent senior secured notes were purchased by its Resorts World Ltd. subsidiary.

"The notes represent a good opportunity for the (Genting) group to expand its investment portfolio and enhance returns on its existing cash balances. With a coupon rate of 9 percent, the investment generates an attractive return compared to what is currently attainable in the money markets or in other secured investments regionally, especially within the (Genting) group's core leisure and hospitality industry," Genting said in a statement.

"Further, the notes will be secured against high quality gaming assets, thereby giving downside risk protection to the investment," Genting said.

It was disclosed last year that MGM Mirage and Genting were discussing potential partnerships in the gaming industry. Genting last year invested $200 million in MGM Mirage stock and debt.

Separately, MGM Mirage announced today that it closed the private offering of the $845 million of 9 percent senior secured notes due March 2020.

The company received about $826 million in net proceeds from the offering. That cash was used to repay some $820 million of loans under its senior credit facility and for fees and expenses.

The repayment satisfied the requirement for a 20 percent reduction to the credit exposures of the company's lenders that agreed to a large debt extension deal announced Feb. 25. The extension of some $3.6 billion in debt to 2014 should help the company ride out the recession that has reduced revenue at its hotels and casinos.

"The closing of this much anticipated transaction is a milestone for our company and its shareholders. It is a re-affirmation of our bank partners' commitments and their long term view of our prospects. These transactions punctuate our many achievements over the last several months and provides our company with a solid financial foundation," Jim Murren, chairman and CEO of MGM Mirage, said today in a statement.

The notes are secured by certain assets including the MGM Grand in Las Vegas.

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