Moody's raises MGM MIRAGE's speculative grade liquidity rating

Mar 19, 2010 5:18 PM

Moody's Investors Service boosted MGM MIRAGE's (MGM) speculative grade liquidity rating on Thursday, citing modest improvement in its liquidity profile and more financial breathing room.

On Wednesday MGM MIRAGE said it raised about $826 million from a recent debt offering. Last month, the casino operator said it reached a deal with lenders to extend the deadline for paying off about $3.6 billion of its $13 billion in debt to February 2014.

MGM MIRAGE said it used the money from the debt offering to prepay approximately $820 million in loans under a senior credit agreement, as well as related fees and expenses. The prepayment helped MGM MIRAGE meet a required 20 percent reduction to credit exposures of lenders as well as restate a senior credit agreement, which is how it extended part of its credit facilities to February 2014.

These changes provide some of the financial flexibility Moody's was looking for.

The ratings agency raised MGM MIRAGE's speculative grade liquidity rating to "SGL-3" from "SGL-4" and maintained a stable outlook. It also affirmed MGM MIRAGE's "Caa1," or junk, corporate family rating.

Moody's said MGM MIRAGE still has a lot of debt due over the next two years and the ratings firm may cut MGM MIRAGE's liquidity rating if it doesn't address looming 2011 debt maturities soon.

Shares of MGM MIRAGE, which is based in Las Vegas, fell 29 cents, or 2.4 percent, to $11.97 in afternoon trading. Over the past year, the stock has traded in a range of $2.28 to $14.25.