By Shane McGinley
CityCenter, part-owned by Dubai World, is struggling to restructure $1.85bn of debt
CityCenter Holdings, the Las Vegas casino part-owned by Dubai World, has sold $1.5bn of senior secured notes in a bid to restructure a portion of its debt.
The company has sold $900m of debt as part of first-lien notes at a rate of 7.625 percent and due in 2016, its part-owner MGM Resorts International said in a statement.
A further $600m of second lien securities at a rate of 10.75 percent and due 2017 was included in the offering.
The casino development, which is the largest on the Las Vegas strip, is a joint venture between MGM Resorts International and Dubai World subsidiary Infinity World Development Corp.
The proceeds, combined with about $77m in equity contributions from its owners, will be used to lower the balance of its existing senior secured credit agreement to $500m from $1.85bn, to create an interest escrow for first lien debt and to pay fees and expenses.
In November, MGM Resorts International reported a $318m loss for the third quarter as it looked to restructure CityCenter’s $1.85bn debt.
"There is lots of interest in a new debt structure at CityCenter," MGM Resorts International chairman and chief executive Jim Murren said in a statement at the time.
Murren added that Aria – City Center’s main casino – “is ramping up” business since it opened in December 2009 and the Las Vegas market was “stabilising."
The Q3 results included another writedown of CityCenter, a high-end complex known for its clean, modern lines rather than the neon and glitter of the Strip. CityCenter has struggled as recession-battered consumers and businesses have cut back on travel and gambling.
MGM owns ten Las Vegas Strip resorts as well as casino-resorts in Mississippi and Michigan and joint ventures in New Jersey and China's Macau.