Published Thursday, April 16, 2009 | 3:11 p.m.
Updated Thursday, April 16, 2009 | 7:11 p.m.
Sun archives
- MGM Mirage gets waiver for $70M CityCenter payment (4-13-09)
- Dubai World wants assurance of CityCenter funding (4-10-09)
- MGM Mirage stock surges on corporate financing news (4-6-09)
- MGM Mirage hires investment firm (4-4-09)
- Australian businessman weighing CityCenter investment (4-3-09)
- CityCenter contingency plan emerges; investor shows interest (3-28-09)
- CityCenter safe — for now (3-28-09)
- In a recession, a delay could be seen by rivals as a positive development (3-28-09)
Investor Carl Icahn and private-equity fund Oaktree Capital Management have bought hundreds of millions of dollars of MGM Mirage bonds and last month told the gaming company a bankruptcy is its best option, the Wall Street Journal reported today, citing people familiar with the matter.
Icahn and Oaktree said they would back a bankruptcy filing, these people told the Journal.
The Journal said it was told by an MGM Mirage spokesperson that the company "and its advisers remain engaged in constructive discussions with its lenders."
The Journal said Icahn's strategy is not clear, though he could be after some of MGM Mirage's assets. Icahn, who formerly controlled the Stratosphere and two Arizona Charlie's in Las Vegas, is now bidding to buy the Atlantic City Tropicana.
MGM Mirage is wrestling with $13 billion in debt as the economy has reduced visitation to its resorts and as it needs funds to finish the CityCenter project. The company and analysts say it could stay out of bankruptcy by using several tools including an equity infusion, asset sales, debt exchanges and the swapping of debt for assets.
Absent such a solution, observers believe MGM Mirage could default on its debt.
"Fitch believes that MGM's impaired credit profile and medium-term financial challenges make default of some kind appear inevitable," Fitch debt ratings service said last month as it lowered MGM Mirage's issuer rating from "CCC," or substantial credit risk; to "C," or exceptionally high level of credit risk.
MGM Mirage stock closed today at $5.90, down 49 cents.
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