MGM Mirage (MGG) has entered into a $7.0 billion financing agreement that will help it complete its acquisition of Mandalay Resort Group (MBG) and construct its planned Las Vegas CityCenter mega-development.
In a news release, the casino resort company said the agreement provides for a $7 billion senior credit facility composed of a $5.5 billion senior revolving credit facility and a $1.5 billion senior term loan facility. The agreement, which will be effective upon completion of the Mandalay merger, amends the company's existing $2.5 billion senior credit facility. Both the senior revolving credit facility and the senior term loan will mature five years after they take effect.
"This historic financing package underscores the tremendous confidence our bank group has in our company, our growth initiatives, as well as our ability to integrate the Mandalay assets," said Jim Murren, chief financial officer MGM Mirage. "This transaction provides us with the funds necessary to close the Mandalay transaction at extremely attractive rates and creates the foundation to begin exciting new real estate development projects such as CityCenter. We expect to close the Mandalay merger during the first quarter of 2005, once all required approvals are received."
Two weeks ago, MGM Mirage unveiled plans for a 66-acre city within a city on the Las Vegas Strip between the Bellagio, which MGM Mirage owns, and the Monte Carlo, in which it holds a 50% stake. The first phase of development will cost about $4 billion.Shares rose 50 cents, or 0.9%, to $57.19.