Company says move will provide a greater cushion or margin of safety with respect to its 2010 cash obligations

MGM Mirage has offered to exchange part of its $780 million senior notes due next year for up to $500 million in senior notes due 2016. The exchange offer expires on September 24 unless extended.

“By our calculations, MGM is not in any danger of breaking its debt covenants in 2010, so this is not a desperation move of any sort,” Janet Brashear of Bernstein Research wrote in a note.

“We believe that management is being prudent by providing a greater cushion or margin of safety with respect to its 2010 cash obligations.”

The casino and hotel giant posted a $212.6 million loss in the second quarter and had $12.3 billion in long-term debt as of June 30.