S&P rates MGM Mirage notes CCC+

Standard & Poor's said it assigned a CCC+ issue-level with a recovery rating of 4 to MGM Mirage's proposed up to $500 million senior unsecured notes due 2016 and affirmed the company's existing ratings, including the CCC+ corporate credit rating.

The outlook is developing.

The new notes will be issued as part of an exchange offer made to holders of MGM Mirage's existing 8½% senior unsecured notes due 2010.

The agency said the CCC+ corporate credit rating reflects MGM Mirage's significant debt burden, S&P's expectation for continued substantial declines in cash flow generation at least through 2009 and the company's tight liquidity position.

The company maintains a leading presence on the Las Vegas Strip, but S&P expects the Strip to be among the weakest performing U.S. gaming markets in 2009. The agency said the company's ability to weather the current downturn and service its intermediate-term debt obligations relies on a substantial moderation of revenue and cash flow declines, which S&P believes is unlikely until at least 2010, or a restructuring of its debt obligations.

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