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MGM Resorts International Completes Landmark Refinancing Transactions

LAS VEGAS, Dec. 20, 2012 /PRNewswire/ -- MGM Resorts International (NYSE: MGM) today announced that it has completed its previously announced refinancing transactions. Specifically, it has:
  • Entered into a $4.0 billion amended and restated credit facility, comprised of a $1.2 billion revolving facility, a $1.05 billion term loan A facility and a $1.75 billion term loan B facility;
  • Issued $1.25 billion of 6.625% senior unsecured notes due 2021; and
  • Accepted all of its outstanding senior secured notes that were tendered in its previously announced tender offers by the early consent date and delivered a notice of redemption for any remaining outstanding senior secured notes in connection with satisfying and discharging these notes.

"This is a landmark refinancing for MGM Resorts International," said Jim Murren, Chairman and Chief Executive Officer of MGM Resorts International. "This transformational transaction has been executed earlier than original expectations and at extremely attractive rates. With a significantly stronger capital structure now in place, our focus remains on continuing to maximize free cash flow, de-levering our balance sheet, and positioning our Company to execute on growth and development initiatives."

As previously announced, the revolving and term loan A facilities will initially bear interest at LIBOR plus 3.00%, but will be subject to credit rating adjustments after six months, which would result in an interest rate of LIBOR plus 2.75% based on current credit ratings. The term loan B facility will bear interest at LIBOR plus 3.25% with a LIBOR floor of 1.00%. The revolving and term loan A facilities will mature in December 2017 and the term loan B facility will mature in December 2019.  The term loan B was issued at 99.5% to initial lenders.

The Company used the net proceeds of the facilities and the net proceeds from the $1.25 billion senior unsecured note offering, together with cash on hand, (i) to repurchase all of its outstanding 13% senior secured notes due 2013, 10.375% senior secured notes due 2014, 11.125% senior secured notes due 2017 and 9% senior secured notes due 2020 (the "Existing Secured Notes") tendered in the previously announced tender offers, (ii) to fund the redemption and satisfaction and discharge of any of the Existing Secured Notes that were not tendered in the tender offers, (iii) to refinance its previous senior credit facility and (iv) to pay transaction-related fees and expenses. The Company intends to use the remaining net proceeds for general corporate purposes.

"With the successful completion of these refinancing transactions, we have raised over $8 billion of long-term capital in 2012 at rates significantly lower than recent years.  We anticipate saving approximately $230 million annually in reduced interest expense from this refinancing, allowing us to improve free cash flow and further enhance our balance sheet," said Dan D'Arrigo, EVP, Chief Financial Officer and Treasurer of MGM Resorts International.

As a result of the refinancing transactions, the Company expects that it will recognize a substantial charge in the fourth quarter of 2012 related primarily to fees and other expenses associated with the refinancing transactions, predominantly consisting of tender and redemption premiums in connection with the repurchase of the Existing Secured Notes. 

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