MGM Mirage, the casino and resort developer partly owned by Dubai World, has drawn down the last US$843 million (Dh3.09 billion) of a $4.5bn standing loan, raising questions among analysts about its ability to complete existing projects and service its debts.
MGM’s shares lost more than 20 per cent of their value on Friday after the ratings agency Standard & Poor’s cut its assessment of the company’s creditworthiness.
MGM Mirage last month said it was scaling back its $9.2bn CityCenter project on the Las Vegas strip to cut costs, raise cash and sharpen its focus. That announcement came on the heels of news that James Murren, the chief executive, had agreed to sell the Las Vegas casino, Treasure Island, for $775m.
S&P cuts its rating on MGM by two notches, to “B minus” from “B plus”, saying the company faced liquidity concerns on the back of falling earnings, according to Bloomberg. S&P said MGM may face difficulties completing CityCenter and in meeting bond payments due in 2010 without selling more assets, or luring additional investment.
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