MGM Mirage amends loan to waive covenants; CityCenter loan amended too

By Sara Rosenberg

New York, April 29 - MGM Mirage amended its senior credit facility, waiving financial covenants through June 30, according to a news release.

Under the amendment, the company will be able to fulfill its remaining equity contributions to CityCenter through the issuance of a $224 million irrevocable letter of credit.

The company is also permitted to enter into revised completion guarantees related to CityCenter.

As part of the amendment, the company repaid $100 million under its revolver, which amount is not available for reborrowing without the consent of the requisite lenders.

Also, lenders were given security interests in the assets of Gold Strike Tunica and certain undeveloped land on the Las Vegas Strip, subject to requisite gaming and other approvals, to secure debt under the facility in an amount up to $300 million.

MGM Grand Detroit, which is a co-borrower under the facility, has agreed to grant the lenders a security interest in its assets to secure its borrowings under the facility, also subject to gaming and other approvals.

The company plans to work with lenders to obtain additional waivers or amendments prior to June 30 to address future non-compliance with the senior credit facility.

The company warned that if a future agreement is not reached, and lenders exercise their rights as a result of defaults, it might file for bankruptcy.

CityCenter loan amended

Also on Wednesday, MGM Mirage announced that the CityCenter credit facility was amended, changing the maturity to June 30, 2012.

In addition, pricing was increased by 200 basis points, with such amount pay-in-kind through September 2010, with additional periodic margin increases through the term of the facility.

Also, certain financial covenants were modified to provide CityCenter with greater flexibility during its first 18 months of operations.

Furthermore, condominium proceeds of up to $250 million may be used to pay for construction costs. Thirty percent of net condominium proceeds in excess of $250 million will be applied to reduce outstanding borrowings under the credit facility, with the remaining 70% available as distributable cash upon CityCenter satisfying certain performance criteria.

The amendment was done in connection with a revised joint venture agreement with Dubai World on a comprehensive plan to fully fund the completion of CityCenter for its scheduled opening later this year.

Under the plan, Dubai World and MGM Mirage will fund their remaining equity contributions to CityCenter through letters of credit, and CityCenter's lenders will immediately fund the full $1.8 billion senior secured credit facility.

Additionally, Dubai World will dismiss the lawsuit that it previously filed against MGM Mirage.

MGM Mirage is a Las Vegas-based gaming, hospitality and entertainment company.

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