MGM Mirage (MGM) Surges After Funding On CityCenter

April 30, 2009 10:12 AM EDT

Shares of MGM Mirage (NYSE: MGM) are up 48% today after reaching a deal with Dubai World and CityCenter's lenders, with lenders immediately funding the full $1.8 billion senior secured credit facility. A lawsuit by Dubai World was also dropped.

MGM also entered into an amendment to its senior credit facility, including a waiver through June 30, 2009, of the requirement that the Company comply with the senior credit facility's financial covenants.

Commenting on the news, analysts at Gabelli & Co said, "the company's success in securing full funding for CityCenter and obtaining a waiver from lenders in this unprecedented environment give us confidence that they will be able to leverage their relationships and navigate the liquidity situation." The firm continues to recommend purchase of MGM shares.

The news is also boosting shares of rival Las Vegas Sands (NYSE: LVS), which has similar debt issues. Shares of LVS are up 11% today.

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