S&P rates MGM Mirage notes BB

Standard & Poor's said it assigned its BB rating to MGM Mirage's $500 million 6.625% senior notes due 2015.

At the same time, S&P affirmed its ratings on MGM, including its BB corporate credit rating, BB senior unsecured rating and B+ subordinated debt rating. The outlook is stable.

S&P said the ratings reflect the company's significant reliance on the Las Vegas Strip for a majority of its cash flow, high debt leverage for the rating, and an active growth strategy. In addition, the company's capital spending is expected to increase significantly beginning in 2007, likely preventing a substantial reduction in debt leverage from that point forward.

Still, the company maintains a solid business profile with a leadership position on the Las Vegas Strip, an experienced management team, operating performance is expected to continue to benefit from the positive market momentum, and favorable long-term growth prospects. In addition, with discretionary cash flow through 2006 expected to be mainly used to reduce debt in advance of intermediate-term capital spending plans, debt leverage is expected to improve from pro forma levels.

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