The partnership behind the Las Vegas Strip’s $8 billion CityCenter resort complex is refinancing some of its debt with a new $1.5 billion bond offering.
CityCenter Holdings, the 50-50 joint venture of MGM Resorts International and Dubai World’s Infinity World Development, has issued $900 million of 7.625 percent senior secured first lien notes due 2016 and $600 million of 10.75 percent senior secured second lien PIK toggle notes due 2017. The interest rate on the second lien notes increases by 0.75 percent if CityCenter elects to pay interest in the form of additional debt.
The company said it also received approximately $77 million in equity contributions from MGM Resorts Infinity World.
Proceeds from the offering and the contributed equity will be used principally to reduce CityCenter Holding’s outstanding senior secured debt from approximately $1.85 billion to $500 million and establish an interest escrow account for the company’s first lien notes and remaining senior credit facilities.
In line with the offering, the due date for the remaining $500 million was extended to Jan. 15, 2015.
MGM Resorts CEO James J. Murren said the sale puts CityCenter on “solid long term financial footing”.