MGM Resorts believes its liquidity is sufficient as it transforms to a 'recovery story'

By Lisa Kerner

Charlotte, N.C., Feb. 14 - MGM Resorts International chief financial officer Dan d'Arrigo said he believes the company currently has sufficient liquidity to cover its debt maturities into 2013.

D'Arrigo made his comments during the company's fourth-quarter and year-end earnings call on Monday.

The CFO said the company currently has liquidity from excess cash and the amount under its revolving credit facility of roughly $840 million.

Since the end of the year, the company has used credit facility proceeds to retire about $326 million of bonds that matured in early February.

For the remainder of 2011 and through the of end 2012, the company has bond maturities of $670 million; about $130 million of the maturities remain in 2011 and about $545 million in 2012.

President and chief executive officer Jim Murren said 2010 was an important year for MGM Resorts. The company was active in the capital markets, significantly improved its balance sheet and transformed its narrative from a liquidity to a recovery story, he said.

MGM Resorts extended the maturity of its $3.5 billion credit facility to 2014 and raised an additional $3 billion of debt and equity capital during 2010, a company news release said.

At Dec. 31. the company had about $12.3 billion of debt including $2.3 billion of borrowings outstanding under its senior credit facility. The available borrowing capacity under the facility was about $1.2 billion.

The company said that during 2010, it made several capital market transactions:

• In March, MGM Resorts issued $845 million of 9% senior secured notes due 2020 for net proceeds of $826 million;

• In April, the company issued $1.15 billion of 4.25% convertible senior notes due 2015 for net proceeds of $1.12 billion;

• In October, MGM Resorts issued 40.9 million shares of common stock for net proceeds of about $512 million and in November received an additional $77 million of net proceeds from the exercise of the underwriter's over-allotment option for an additional 6.1 million shares; and

• In October, the company issued $500 million of 10% senior notes due 2016 at a discount to yield 10¼%. The net proceeds were about $486 million.

MGM Resorts said it used a portion of the net proceeds from the October equity offering and all of the proceeds of the October debt offering to retire $1.2 billion of commitments under its credit facility that were scheduled to mature in October 2011 and effect the extension of $3.5 billion of the credit facility to February 2014.

For the fourth quarter, MGM Resorts reported a net loss of $139 million, or $0.29 per share, compared with a net loss of $434 million, or $0.98 per share in the prior-year quarter.

Net revenue was $1.5 billion for the quarter and $6 billion for the year.

Operating income for the fourth quarter was $107 million, compared with a $487 million operating loss in the fourth quarter of 2009.

The company's operating loss increased to $1.2 billion in 2010 from $1.0 billion in 2009. MGM Resorts' loss per share for 2010 was $3.19, compared with a loss of $3.41 per share in 2009.

Las Vegas-based MGM Resorts owns and operates casino resorts in the United States.

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