MGM rises on numbers; Ford up with sales; SugarHouse sets talk; Primary Energy on hold

By Sara Rosenberg

New York, Aug. 3 - MGM Mirage's term loan headed higher during Monday's trading session after the company came out with quarterly earnings results that showed a decline from last year but were still considered as fairly decent by market players.

Also in the secondary, Ford Motor Co.'s term loan was stronger on the company's July sales numbers, which actually increased on a year-over-year basis.

In other news, SugarHouse Casino posted the term sheet on its credit facility, outlining structure and price talk for lenders, and Primary Energy Recycling Corp.'s proposed senior secured term loan has been pulled from market.

MGM Mirage strengthens

MGM Mirage's term loan posted some gains on Monday following the release of second-quarter numbers that were viewed as being not too bad, according to traders.

One trader had the term loan quoted at 84 bid, 85 offered, up from 82¾ bid, 83¾ offered, and a second trader had the term loan quoted at 84 bid, 85½ offered, up from 82 bid, 83½ offered.

For the second quarter, the company reported a net loss of $212.6 million, or $0.60 per diluted share, compared to net income of $113.1 million, or $0.40 per diluted share, in the prior-year second quarter.

Revenues for the quarter were $1.494 billion, down 17% from $1.896 billion in the previous year.

EBITDA for the quarter was $305.5 million, compared to $531 million last year and property EBITDA for the quarter was $357 million, a 34% decrease from the 2008 second quarter.

MGM reduces debt

At June 30, MGM Mirage had about $4.1 billion of borrowings outstanding under its senior credit facility with available borrowings of $1.5 billion. Total long-term debt was $12.3 billion, down $1.1 billion from Dec. 31, 2008. And, the company's cash balance was $411 million at June 30.

As was previously disclosed, during the second quarter the company secured financing for the completion of CityCenter, issued $1.15 billion of equity through an offering of common stock, issued $1.5 billion of senior secured notes, and amended its senior credit facility to permanently waive prior non-compliance with financial covenants and provide for minimum EBITDA and maximum annual capital expenditure tests to replace the previous leverage and interest coverage tests.

"This has been a monumental quarter for us, as the significant capital market transactions and other corporate finance activities meaningfully improved our financial position," said Jim Murren, chairman and chief executive officer, in a news release.

"Perhaps as important, we saw a more stabilized - though still difficult - operating environment in the second quarter. Our operating teams are focused on continuing to sequentially increase cash flow and our CityCenter team is driving towards completion and opening of CityCenter. We believe CityCenter will invigorate the Las Vegas market and be a key component of the future growth of MGM Mirage," Murren added.

MGM Mirage is a Las Vegas-based gaming, hospitality and entertainment company.

Ford better on sales

Ford's term loan also saw some upward momentum during market hours as the company announced July sales numbers that showed an improvement over last year's results, according to traders.

One trader had the term loan quoted at 86 bid, 87 offered, up from 85 bid, 86 offered, and a second trader had the term loan quoted at 85¾ bid, 86¾ offered, up from 84½ bid, 85½ offered.

For the month of July, Ford's total sales were 165,279, up 2.3% from 161,530 in the comparable period last year.

Car sales for the month were 62,176, up 8.7% from 57,177 last year.

And, truck sales for July were 96,662, down 2.6% from 99,229 in 2008.

The Dearborn, Mich.-based automaker said that customer demand for its fuel-efficient vehicles coupled with the U.S. government's Car Allowance Rebate System enabled it to post the first sales increase of any major manufacturer in 2009.

SugarHouse details come out

Switching to the primary market, SugarHouse Casino's term sheet for its proposed $180 million credit facility made its way to potential investors, revealing structure and price talk, according to a fund manager.

The term sheet details the facility as a $10 million revolver, a $20 million delayed-draw term loan talked at Libor plus 825 basis points with a 3% Libor floor and an original issue discount of 96, and a $150 million funded term loan talked Libor plus 825 bps with a 3% Libor floor and an original issue discount of 96, the fund manager said.

Previously, market sources had heard that price talk was in the 12% area and that the loan was "going to high-yield types."

Credit Suisse and Jefferies are the lead banks on the facility.

Proceeds will be used to fund the construction of the SugarHouse Casino on the Delaware River in Philadelphia by HSP Gaming, LP.

SugarHouse proceeding nicely

Another market source told Prospect News that he heard the SugarHouse Casino credit facility was being "well received" by the market since officially launching into syndication on Thursday of last week.

"Comps nicely to Chester," the fund source added.

Chester Downs and Marina LLC, the operator of a racetrack casino in Chester, Pa., priced its $230 million seven-year term loan (B3/B) last week at Libor plus 987.5 bps with a 2.5% Libor floor and an original issue discount of 94.125.

Citigroup, Bank of America, JPMorgan and Jefferies were the joint leads on the Chester Downs deal that is being used to refinance existing debt and purchase partnership interests.

Primary Energy pulls deal

In more primary happenings, Primary Energy Recycling's proposed $152.5 million senior secured term loan (BB) has been put on hold for now, according to an informed source.

The term loan was being talked at Libor plus 850 basis points with a 2.5% Libor floor and an original issue discount of 97.

Credit Suisse was acting as the lead bank on the deal that had quarterly scheduled amortization payments, a quarterly cash sweep of excess cash flow and mandatory prepayments of net cash proceeds from asset sales.

Proceeds were going to be used to repay the company's existing $135 million term loan due on Aug. 24.

A condition of the new term loan was that the company successfully complete the conversion of all of its 11.75% subordinated notes into newly issued common shares.

Primary Energy is an Oak Brook, Ill.-based owner and operator of recycled energy projects and a pulverized coal facility.

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