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MGM Mirage, Deutsche Bank financing talks fail

Wed Mar 4, 2009 10:03pm EST

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NEW YORK, March 4 (Reuters) - Casino operator MGM Mirage (MGM.N) and partner Dubai World have failed to reach a deal with Deutsche Bank AG (DBKGn.DE) over the final $1.2 billion in financing for their Las Vegas Strip CityCenter project, according to industry sources.

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The talks involved an arrangement under which Deutsche Bank would contribute its Cosmopolitan resort to CityCenter and provide a $1.2 billion loan, potentially in return for an equity stake in the MGM property.

The negotiations were the chief reason MGM has delayed the filing of its fourth-quarter earnings release, said one source familiar with the matter.

Deutsche Bank acquired the under-construction Cosmopolitan Resort & Casino in a foreclosure last year after developer Ian Bruce Eichner defaulted on a $760 million construction loan.

The Cosmopolitan is located on the western side of the Strip between the multi-tower CityCenter project and MGM's Bellagio resort.

Hit by the credit crunch and a downturn in gambling, MGM Mirage and Dubai World have yet to raise all of the money needed to complete CityCenter, most of which is scheduled to open at the end of this year.

MGM, which is majority-owned by Kirk Kerkorian's Tracinda Corp, warned on Tuesday that it may breach terms in its credit agreements this year if adverse economic conditions continue.

The company said it is in talks with its bank lenders for a waiver on its loans or to amend the debts' covenants, but said there was no assurance that lenders will agree. (Reporting by Deena Beasley; Editing by Gary Hill)

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