MGM gets tenders for majority of 13%, 10 3/8%, 11 1/8%, 9% notes

By Toni Weeks

San Diego, Dec. 20 - MGM Resorts International announced the early results of its cash tender offers for any and all of its $750 million of 13% senior secured notes due 2013, $650 million of 10 3/8% senior secured notes due 2014, $850 million of 11 1/8% senior secured notes due 2017 and $845 million of 9% senior secured notes due 2020.

According to a press release, holders tendered $537.76 million, or 71.7%, of 13% senior secured notes, $417,803,000, or 64.28%, of 10 3/8% senior secured notes, $707,254,000, or 83.21%, of 11 1/8% senior secured notes and $843,419,000, or 99.81%, of 9% senior secured notes by the consent payment deadline of 5 p.m. ET on Dec. 19.

For each $1,000 principal amount, MGM will pay $1,110.84 for the 13% notes, $1,134.82 for the 10 3/8% notes, $1,097.66 for the 11 1/8% notes and $1,146.76 for the 9% notes, each including a consent payment of $30.00 for those who tender prior to the consent payment deadline.

The company will also pay accrued interest up to the applicable settlement date.

Tendered notes may no longer be withdrawn.

The company also solicited consents to amend the note indentures to eliminate substantially all of the restrictive covenants, certain related events of default and certain other provisions. MGM needed consents from holders of greater than a majority in principal amount of each note series, which has been satisfied, and as a result has executed supplemental indentures to the indentures governing each series of notes.

Initial settlement is earmarked for Dec. 20. The offers will end at 11:59 p.m. ET on Jan. 4, with final settlement on Jan. 7.

According to a separate news release, the company has completed its comprehensive refinancing transactions, which consist of acceptance of all outstanding senior secured notes tendered in the tender offer by the early consent date, the issuance of $1.25 billion of 6 5/8% senior unsecured notes due 2021 and arrangement of a $4 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.

MGM also said it has delivered a notice of redemption for any remaining outstanding senior secured notes following the tender offer. The redemption, as well as the tender offer, will be funded with proceeds of the credit facilities and senior note offering. Remaining proceeds will be used for general corporate purposes.

"This is a landmark refinancing for MGM Resorts international," chairman and chief executive officer Jim Murren said in the release. "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 a result of the refinancing transactions, the company said it raised more than $8 billion of long-term capital in 2012 at rates significantly lower than in previous 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," chief financial officer and treasurer Dan D'Arrigo said in the release.

MGM will recognize a substantial charge in the fourth quarter of 2012 related to the refinancing transactions, the release noted.

J.P. Morgan Securities LLC (800 245-8812), Barclays (800 438-3242 or call collect 212 528-7581), Bank of America Merrill Lynch, Deutsche Bank Securities Inc., BNP Paribas Securities Corp. and RBS Securities Inc. are the joint dealer managers and solicitation agents.

Global Bondholder Services Corp. (866 540-1500 or collect 212 430-3774) is the information and tabulation agent.

MGM is a Las Vegas-based gaming and lodging company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.