S&P Rates MGM Mirage Bonds

NEW YORK -- Standard & Poor's Ratings Services assigned a BB+ rating to MGM MIRAGE's proposed bond issue of $550 million in notes due Sept. 1, 2012.

The bond rating agency also placed the rating on CreditWatch with negative implications. Proceeds from the offering will be used to pay bank debt.

All other ratings on MGM MIRAGE, including its BB+ corporate credit rating, remain on CreditWatch with negative implications, S&P said. The agency put the ratings on watch June 7 following MGM MIRAGE's announcement that it intended to purchase Mandalay Resort Group.

S&P said it will review several factors in determining whether to raise or lower the company's credit ratings. Those factors include the method of financing the deal, the combined company's capital structure, potential assets that might be sold as a result of the merger and management's near- and longer-term growth objectives, integration plans and financial policies, the agency said.

Separately, Fitch Ratings assigned a BB+ rating to the notes. Fitch placed MGM MIRAGE's long-term ratings on Rating Watch Negative in June following the merger announcement. Fitch said it expects the Rating Watch status to be resolved when the final terms of financing and the pace of deleveraging following the acquisition are announced.

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