CityCenter prices $1.5 billion notes offering

Associated Press

Friday, Jan. 14, 2011 | 8 a.m.

CityCenter Holdings LLC, a joint venture between MGM Resorts International and Dubai World's Infinity World Development Corp., has priced a $1.5 billion senior secured notes offering.

The offering includes $900 million 7.625 percent senior secured first lien notes due 2016 and $600 million 10.75 percent senior secured second lien notes due 2017.

CityCenter said Friday that it expects to use the offering's proceeds, combined with about $77 million in equity contributions from its owners, to lower the balance of its existing senior secured credit agreement to $500 million from $1.85 billion, to create an interest escrow for first lien debt and to pay fees and expenses.

The $500 million balance of the senior secured credit facility will be extended to January 2015 under an amended and restated agreement.

MGM, in which Kirk Kerkorian is a major investor, has said the Las Vegas market is stabilizing. But it has continued to book losses on its stake in the mammoth $8.5 billion CityCenter complex on the Las Vegas Strip, which was hit hard by the recession and slow economic recovery. CityCenter posted an operating loss of $1.27 billion during the first three quarters of 2010.

The offering is expected to close on Jan. 21.