CityCenter to begin syndication on Tuesday for portion of $3 billion credit facility

By Sara Rosenberg

New York, Oct. 6 - CityCenter is scheduled to hold a retail bank meeting in Las Vegas on Tuesday to finish raising the funds for its proposed $3 billion senior credit facility due April 2013, according to a market source.

Bank of America, Royal Bank of Scotland, UBS, BNP Paribas and Sumitomo Mitsui are the lead banks on the deal. In addition, other current participants include Deutsche Bank, Morgan Stanley and the Bank of Nova Scotia.

The facility consists of a $250 million revolver and $2.75 billion in term loans.

Initial pricing on the facility is Libor plus 375 basis points and this pricing will remain in effect through the construction period.

An original issue discount on the term loan debt is expected to be announced on Tuesday in connection with the launch, the source remarked.

The company said in a news release Monday that it completed the first phase of the financing, securing $1.8 billion in commitments, and through this next phase, it expects to raise an additional $1.2 billion in orders.

The market source explained that this $1.8 billion of bank debt has already been successfully placed and the purpose of the Tuesday meeting is to fill out the remainder of the deal.

CityCenter also said that it has received additional signed commitment letters totaling in excess of $500 million, which commitments are expected to be added to the facility once completed.

In early August, the company discussed this financing package, saying that it was working with several relationship lenders and that it had, at that time, already received firm commitments totaling $1.65 billion from the lead banks.

Security is substantially all of the assets of CityCenter.

Proceeds will be used for project financing.

The estimated net project budget for CityCenter is $8.6 billion, after net residential proceeds of about $2.7 billion. The gross project budget consists of $9.3 billion of construction costs, $1.7 billion of land, $200 million of preopening expenses and $100 million of intangible assets.

CityCenter is scheduled to be completed in December 2009.

"Even in the current difficult lending environment, strong well-conceived projects attract financing - CityCenter is such a project. We appreciate the strong support CityCenter has received from these participating financial institutions," said Dan D'Arrigo, executive vice president and chief financial officer of MGM Mirage, in the release.

"We and our partner are actively in discussions with additional financial institutions to obtain the additional funding of the credit facility and are receiving strong interest in the syndication process set to launch this week."

CityCenter, a joint venture between MGM Mirage and Dubai World, is a mixed-use development, built on 76 acres along the Las Vegas Strip between the Bellagio and Monte Carlo resorts.

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