Casino shares jump after funding news for MGM Mirage
Thursday 30th October 2008
Despite the doom and gloom of the US recession casino giant MGM Mirage has announced additional funding for its CityCentre project in Las Vegas. The project will cost $9.2 billion in total and while there were concerns the project would be delayed, a $1.8 billion banking arrangements earlier this month had taken some of the pressure off the MGM Mirage balance sheet, not to mentioned today’s $500 additional loan to the pool.
It was also confirmed that joint-venture partner Dubai World is also in discussions with financiers to secure a further $3 billion in additional funding for the project. While this news came out of the blue it could not have been better timed with news that US interest rates have been cut to 1%. The reduced cost of finance, where available, should help to take some of the pressure off the casino sector and hopefully ensure that consumers have more money in their pockets next time they visit their local casino.
While the MGM Mirage news was dominated by the funding announcement it must be remembered that third-quarter profits were down by 67% due to a mixture of write-downs and reduced activity at their casino operations. It will be interesting to see if there is any major follow-through over the coming weeks as the sector could certainly do with some more good news.
Despite the doom and gloom of the US recession casino giant MGM Mirage has announced additional funding for its CityCentre project in Las Vegas. The project will cost $9.2 billion in total and while there were concerns the project would be delayed, a $1.8 billion banking arrangements earlier this month had taken some of the pressure off the MGM Mirage balance sheet, not to mentioned today’s $500 additional loan to the pool.