NEW YORK (Reuters) - MGM Mirage said on Wednesday it amended its senior credit facility, allowing the casino operator to offer up to $2.5 billion in stock and debt, sending shares down nearly 10 percent in early trading.
As part of the amendment, MGM Mirage would privately place $1.5 billion worth of senior secured notes. The company will also offer 81.0 million common shares, which it hopes will raise about $1 billion.
The company, which is controlled by billionaire Kirk Kerkorian, said it will use the proceeds from the two offerings mainly to repay debt.
MGM Mirage, burdened with $14 billion of debt, previously gained a waiver from lenders giving it until June 30 to bring borrowings in line with financial covenants.
The company has come close to violating loan covenant dictating the level at which earnings as a ratio of debt must be maintained.
Earlier this month, MGM Mirage posted a quarterly profit, helped by a gain from a resort sale, and said cancellations were slowing.
The company said then it was continuing to seek a long-term solution to improve its financial position.
MGM Mirage also said it commenced a cash tender offer for Mandalay Resort Group's $226.3 million, 6.50 percent senior notes due July 31, and its $820.0 million, 6.00 percent senior notes due October 1.
MGM's shares have traded in a wide 52-week range -- from a high of $53.67 on May 16, 2008, to a low of $1.81 on March 6, this year.
Its shares fell about 10.5 percent to $11.10 in premarket trading Wednesday.
Merrill Lynch, Deutsche Bank, J.P. Morgan, Morgan Stanley and UBS are acting as joint bookrunners for the share offering.
(Reporting by Bijoy Koyitty in Bangalore and Deepa Seetharaman in New York; Editing by Maureen Bavdek)
