MGM Mirage pledges collateral for senior notes, bank debt after Moody's downgrade

New York, Feb. 27 - MGM Mirage said it was required to re-collateralize $4.3 billion of its debt after Moody's Investors Service downgraded it to junk.

The Las Vegas, Nev. casino operator said in a filing with the Securities and Exchange Commission that the new pledges are for its credit facilities and senior notes. The action was taken after Moody's cut MGM Mirage's long-term debt rating to Ba1 and short-term rating to Not Prime.

Under an agreement effective Feb. 13 with its banks and the trustees for the senior notes, MGM Mirage and its restricted subsidiaries granted liens in or otherwise pledged "substantially all" their assets.

Collateral agent for the agreement is U.S. Bank NA.

Debt benefiting from the new collateral is the company's multi-year loan agreement and short-term loan agreement with Bank of America, NA as administrative agent; MGM Mirage's $850 million 8½% senior notes due 2010; MGM Grand, Inc.'s $200 million of 6 7/8% senior notes due 2008 and $300 million 6.95% senior notes due 2005; and Mirage Resorts Inc.'s $200 million 6 5/8% notes due 2005, $200 million 6¾% notes due 2007, $200 million 6¾% notes due 2008, $250 million 7¼% notes due 2006 and $100 million 7¼% debentures due 2017.

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