RLPC: MGM cuts spread on $1.5B refinancing loan

NEW YORK Wed Dec 12, 2012 3:04pm EST

NEW YORK Dec 12 (Reuters) - MGM Resorts cut pricing on its $1.5 billion, seven-year term loan B, sources told Thomson Reuters LPC. The loan is now expected to price at 325bp over Libor with a 1 percent Libor floor and a discount of 99.5.

Previously, the loan was talked at LIB+375, with a 1 percent Libor floor and a 99.5 OID. The term loan B will be covenant-lite.

The new credit will also include a $1.25 billion, five-year revolving credit and a $1.25 billion, five-year term loan A. The term loan A and the revolver will have covenants for minimum Ebitda and maximum capital expenditures.

The term loan B will have 101 soft call protection in year one. The term loan A and the term loan B will amortize at 1 percent per annum. Bank of America Merrill Lynch and Deutsche Bank are joint physical books, while Barclays and JP Morgan are lead arrangers on the deal. Books close and comments on the credit agreement are due at 12 p.m. tomorrow. At launch, the commitment deadline was set for December 17. MGM Resorts International and MGM Grand Detroit, LLC are borrowers on the new credit.

Proceeds will refinance existing debt and back general corporate purposes. On December 6, MGM priced an upsized $1.25 billion issue of senior unsecured notes.

MGM Resorts International operates a portfolio of destination resort brands, including Bellagio, MGM Grand, Mandalay Bay and The Mirage.

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