Moody's puts MGM Mirage ratings on review

Moody's Investors Service on Friday placed the ratings of MGM Mirage on review for possible downgrade, prompted by the softening of the Las Vegas gambling market and the company's need to secure financing for its City Center joint venture.

Ratings placed on review for possible downgrades include the non-investment grade "Ba2" for corporate family, probability of default and senior unsecured notes ratings as well as the "Ba1" rating for senior subordinated notes.

Las Vegas reported much larger-than-expected declines in gaming revenues in May, Moody's reported. The deteriorating market comprises about 80 percent of MGM's earnings before interest, taxes, depreciation and amortization.

Moody's also said the company's credit could weaken to a level inconsistent with its current "Ba2" rating because of uncertainty regarding the level of future funding support for City Center. MGM Mirage has a 50 percent interest in CityCenter Holdings Inc., a mixed-use project on the Las Vegas Strip.

Mirage Resorts' "Ba2" rating on senior unsecured notes and Mandalay Resort Group's "Ba2" for senior unsecured notes and "B1" for senior subordinated notes are also being reviewed.

Moody's also affirmed the company's speculative grade liquidity rating at SGL-3, reflecting adequate liquidity. The company's negative free cash flow is offset by borrowings available under its $4.5 billion revolving credit facility.

Moody's review will focus on evolving operating trends in the Las Vegas gaming market, the final terms of the City Center financing and their impact on the company's liquidity and credit profile.

Headquartered in Las Vegas, MGM Mirage owns 17 properties in Nevada, Mississippi and Michigan. Shares rose 13 cents to $26.23 in morning trading.