By Paul A. Harris
St. Louis, May 14 - MGM Mirage priced $1.5 billion of senior secured notes (B1/B) on Thursday, according to an informed source.
The company priced $650 million of 10 3/8% five-year notes at 97.184 to yield 11 1/8%. The yield came on top of yield talk, while the issue price came cheap to the 2 points of original issue discount price talk.
MGM Mirage also priced $850 million of 11 1/8% 8.5-year notes at 97.344 to yield 11 5/8%. Again the yield was printed on top of yield talk while the issue price came cheap to the 2 points OID price talk.
There was more than $10 billion of orders from over 100 accounts, according to a banker who was part of bookrunning syndicate.
Banc of America Securities LLC, Barclays Capital, Citigroup, RBS Greenwich Capital and Wachovia Securities were joint bookrunners for the Rule 144A with registration rights offer.
The notes are secured by the company's Bellagio and Mirage properties.
Proceeds along with funds from a concurrent $1 billion stock offering will be used to repay at least $750 million of bank debt, redeem all of the 7¼% senior debentures due 2017, purchase all of the 6% senior notes due 2009 of Mandalay Resort Group and senior notes due 2009 tendered in the pending tender offer, and for general corporate purposes.
MGM Mirage is a Las Vegas-based development company with gaming and resort operations.
| Issuer: | MGM Mirage
|
| Face amount: | $1.5 billion
|
| Proceeds: | $1.459 billion
|
| Security description: | Senior secured notes
|
| Bookrunners: | Banc of America Securities LLC, Barclays Capital, Citigroup, RBS Greenwich Capital, Wachovia Securities
|
| Co-managers: | BNP Securities, CommerzBank, Daiwa, Deutsche Bank Securities, JP Morgan, Morgan Stanley, UBS Investment Bank
|
| Trade date: | May 14
|
| Settlement date: | May 19
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
|
|
| Five-year notes
|
| Face amount: | $650 million
|
| Proceeds: | $631.696 million
|
| Maturity: | May 15, 2014
|
| Coupon: | 10 3/8%
|
| Price: | 97.184
|
| Yield: | 11 1/8%
|
| Spread: | 918 bps
|
| Call protection: | Non-callable, make-whole provision at Treasuries plus 50 bps
|
| Price talk: | 11 1/8% area with 2 points of original issue discount
|
|
|
| 8.5-year notes
|
| Face amount: | $850 million |
|
| Proceeds: | $827.424 million
|
| Maturity: | Nov. 15, 2017
|
| Coupon: | 11 1/8%
|
| Price: | 97.344
|
| Yield: | 11 5/8%
|
| Spread: | 876 bps
|
| Call features: | Make-whole at Treasuries plus 50 bps until May. 15, 2013, the callable at 105.563, 102.781, par on and after May 15, 2015
|
| Price talk: | 11 5/8% area with 2 points of original issue discount
|
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