S&P drops MGM to CCC

Standard & Poor's said it lowered MGM Mirage's corporate credit rating to CCC from B- and removed ratings from CreditWatch, where they were placed with negative implications on Jan. 30.

The outlook is negative.

"The downgrade reflects our belief that, given our projections for cash flow generation over the next few years, combined with substantial capital needs to fund the completion of CityCenter and to meet debt maturities, MGM Mirage's ability to service its current capital structure is in doubt," S&P analyst Ben Bubeck said in a statement.

The CCC corporate credit rating reflects significant debt burden, expectation for continued substantial declines in cash flow generation at least through 2009 and an inadequate liquidity position, the agency noted.

As of Dec. 31, operating lease-adjusted total debt-to-EBITDA ratio, excluding income from unconsolidated affiliates, was 7.5x.

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