Red was the dominant color at MGM Mirage (NYSE:MGM). Red for the company's shares dropping more than 11% on Thursday, and red for the faces of its finance team after the company canceled a debt exchange, citing insufficient investor interest.

MGM Mirage had asked selected investors to lengthen the maturity of as much as $500 million in senior notes from next year to 2016. The lure was a higher interest rate – 10% versus 8.5%.

But there weren't enough takers, even though MGM Mirage, which made the initial offer on Aug. 27, extended one deadline on Sept. 11, and amended the terms on Sept. 17.

Raising money, buying time
The setback stopped MGM Mirage's streak of successful efforts this year to improve its balance sheet. Among its deals, MGM Mirage sold a casino for $775 million, completed a public stock offering that provided $1.1 billion, and sold $1.5 billion in senior notes.

MGM Mirage also has signed agreements to renegotiate debt-payment terms and to solidify the financing of its CityCenter resort, condominium, casino, and retail complex in Las Vegas. CityCenter is scheduled to open in December.

Even if the debt-exchange had been successful, however, MGM Mirage would have had a long way to go. A late September report by Fitch Ratings points out that the company's "most significant credit hurdle" is the maturity of a $5.8 billion credit facility in 2011. As of June 30, the credit facility had $4.1 billion outstanding.

Fitch offered its comments after placing a "substantial credit risk" rating on MGM Mirage's recent issuance of $475 million in unsecured senior notes, due in 2018. Fitch added that MGM Mirage "may have enough liquidity" to take care of nearly $1.1 billion in debt coming due next year.

Check those numbers
Thanks to aggressive expansion and the recession, casino operators have encountered debt problems as severe as bankruptcy, or as chronic as frequent visits to debt and/or equity markets.

Balance sheet repair for MGM Mirage, as well as peers like Wynn Resorts (NASDAQ:WYNN) and Las Vegas Sands (NYSE:LVS), continues, while casino giants have enjoyed sharp increases in their shares since March.

While investors may cheer the gains, they must look under the financial hood. Fitch Ratings, for example, places junk bond ratings on all MGM Mirage debt on which it has an opinion.

Do the math here, Fool. It'll help you determine whether the company's recent stock action reflects sustained growth and health, or just a debt-cat bounce.