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LAS VEGAS, Nevada -- MGM Mirage said Friday its lenders have given the casino operator three additional years to pay back about $4.37 billion of a $5.5 billion credit line that was due next year.
The extension was sought by MGM Mirage in an effort to improve the company's balance sheet as it struggles to repay its debts amid an economic decline that has cut visitation and customer spending at its hotel-casinos.
"The transaction provides us with additional long-term financial flexibility and reflects our continued commitment to strengthen our financial position," MGM Mirage Chairman and Chief Executive Officer Jim Murren said in a statement.
Under the agreement, MGM Mirage's bonds that were due to mature on Oct. 3, 2011, will now come due on Feb. 21, 2014.
The agreement requires the company to repay $820 million to lenders that have agreed to the extension. It also will pay about $2.1 billion to lenders that do not agree to extend maturities by October 2011.
Oppenheimer gaming analyst David Katz said the agreement helps improve MGM Mirage's liquidity.
"The announcement ... removes some uncertainty as to the company's bank financing going forward and demonstrates the support of the financial markets," Katz told investors.
Union Gaming Group principal Bill Lerner said the agreement will help MGM Mirage as it pursues an initial public officer on the Hong Kong Stock Exchange in order to raise additional funds.
Lerner thought the company could bring about $300 million raised in the IPO back to the United States.
As part of the credit facility amendment, the company's lenders approved a plan for MGM Mirage to transfer its 50 percent ownership of the Borgata in Atlantic City and its adjacent land holdings into a trust.
MGM Mirage is seeking to sell its Atlantic City holdings as a way of settling a complaint filed by New Jersey gaming regulators over the company's business dealings with its Macau joint venture business partner.
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