MGM MIRAGE completes $1B. Common Stock offering
May 14, 2009
(updated May 19) MGM MIRAGE announced
that it has completed its previously announced private offering of $1.5
billion total principal amount of senior secured notes and underwritten
public offering of more than $1 billion of MGM MIRAGE common
stock. The company also announced that Amendment No. 6 to its senior credit
facility became effective today.
"This marks a new beginning for our company,"
said Jim Murren, chairman and CEO of MGM MIRAGE .
"The tireless efforts of our finance and legal teams, along with the
support of our lenders and investors, have culminated in a viable solution to
the complex issues relating to our financial position and liquidity. We are now
well positioned to continue the work needed to achieve recovery and improve
profitability, and we do so while still possessing the finest brand portfolio
in the industry and the promise of CityCenter, a development that I am
confident will surpass expectations."
The senior secured notes were issued in two tranches
consisting of: $650 million of 10.375% senior secured notes due
2014 at a price of 97.184%; and $850 million of 11.125% senior
secured notes due 2017 at a price of 97.344%. The notes rank as general senior
obligations of MGM MIRAGE , are
guaranteed by substantially all of MGM MIRAGE's subsidiaries
and have a first priority security interest in Bellagio and The Mirage. The
Company received approximately $1.42 billion in net proceeds
from the sale of the notes.
The company issued 143 million shares of common stock to
the public, as well as 21.45 million shares pursuant to the underwriters'
over-allotment option, at a per share price of $7.00 . The
Company received total net proceeds of approximately $1.10 billion
from the sale of the common stock.
The net proceeds from the sale of the senior secured
notes and common stock will be used to: repay a portion of the outstanding
amount under the senior credit facility, including a permanent repayment of
approximately $825.6 million ; redeem all of the 7.25% Senior
Debentures due 2017 of Mirage Resorts, Incorporated ; purchase all
of our 6% Senior Notes due 2009 and all of the 6.50% Senior Notes of Mandalay
Resort Group tendered in the pending tender offers; and for general
corporate purposes.
Amendment No. 6 to the company's senior secured credit
facility allowed the company to execute the offerings described above,
permanently waived prior non-compliance with financial covenants, and amended
the financial covenants to provide for minimum EBITDA and maximum annual
capital expenditure tests, replacing the previous leverage and interest
coverage tests. The senior credit facility matures in October 2011.
The senior secured notes have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws, and, unless so registered, may not be offered or sold
within the United States or to, or for the account or
benefit of, U.S. persons except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
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