About a month ago the media was having a feeding frenzy. MGM Mirage and Dubai World missed a self imposed deadline to secure the final $3 billion in funding for the $9.2 billion ($11.2 billion including the land) City Center. At the time, they had only been able to secure $1.6 billion of the remaining amount for the largest private commercial development in the US history. Some reports went as far as to say the project opening next year was 'in trouble'. The response from the partners was....no, it's that global credit markets are tough these days and negotiations for good rates are taking longer, and that they expected to have everything in place by the end of September.
Well now there's some bad news for those naysayers in the media. MGM Mirage has reached the halfway point of the balance, by securing another $700 million in loans, at 375 basis points above London InterBank Offered Rate (LIBOR). Of course the center of attention in their discussions was the rate as they had said, and looks like they battled it out to get one that is reasonable considering all the gloom & doom slinging of the media. MGM Mirage COO Jim Murren also mentions that he expects to have the final portion in place by the new end-of-next-month self imposed deadline. More loan commitments or self funding the balance...he doesn't say.
There's also a brief mention of Dubai World and a possible 20% stake in MGM Mirage stock. Dubai World currently owns 9.4%, and last week won approvals from the New Jersey Gaming to up that to 20%. They had won approvals from Michigan Gaming in April for 14.75% stock ownership, and would have to return for the 20% endorsement. It would appear that since they are pursuing these approvals for added shares, they just might see some value in the investment in this company and Las Vegas itself. I guess they just don't pay attention to all the negative news these days.
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