MGM Mirage closes $1.15 billion in senior convertible notes


MUMBAI: MGM Mirage has closed the private offering of $1.15 billion in aggregate principal amount of its 4.25% convertible senior notes due 2015.


Initial purchasers exercised their option to purchase $150 million in aggregate principal amount of additional notes to cover over-allotments, which is included in the $1.15 billion of gross proceeds. The company received approximately $1.12 billion in net proceeds from the offering. Net proceeds were used to repay a portion of the company’s outstanding revolving indebtedness under its senior credit facility.


"The closing of this transaction is another milestone for our Company and its shareholders. We received strong investor demand and the transaction exceeded our expectations. We believe this capital raise was achieved to the benefit of all of our stakeholders," said MGM Mirage chairman and CEO Jim Murren.


"We continue to improve the maturity profile of our Company by accessing the capital markets opportunistically and at attractive yields," said MGM Mirage executive vice president and CFO Dan D’Arrigo.


The notes are general unsecured senior obligations of the company, guaranteed by substantially all of the company’s wholly-owned domestic subsidiaries, which also guarantee the company’s other senior indebtedness, and equal in right of payment with, or senior to, all existing or future unsecured indebtedness of the Company and each guarantor.


The notes will pay interest semi-annually at a rate of 4.25% per annum and mature on 15 April, 2015. The notes are convertible at an initial conversion rate of approximately 53.83 shares of the company’s common stock per $1,000 principal amount of the notes, representing an initial conversion price of approximately $18.58 per share of the company’s common stock and a conversion premium of approximately 27.5% based on the last reported sale price per share of the company’s common stock on the New York Stock Exchange on 15 April, 2010 of $14.57 per share.