Station Casinos filing Chapter 11, others sure to follow

GreenDoberman

GreenDoberman

2
Notice how they don't say they are filing bankruptcy in the headline:

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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Feb. 04, 2009
Copyright ? Las Vegas Review-Journal

LOCAL GAMING: Stations seeks restructuring

Company asks for bondholder approval

By ARNOLD M. KNIGHTLY
LAS VEGAS REVIEW-JOURNAL Station Casinos is asking its bondholders to approve a restructuring plan that could see the company emerge from Chapter 11 bankruptcy by this summer, the locals gaming company announced late Tuesday.
The Las Vegas-based company's restructuring proposal comes a day after it missed a $14.6 million bond payment that was due Monday.

Bondholders will have until midnight EST March 2 to accept the company's proposal, which would allow Station Casinos to file for a voluntary Chapter 11 bankruptcy to restructure the company's debt load, according to a release distributed late Tuesday.
If enough bondholders approve the plan, the gaming company's owners -- the Fertitta family and private equity firm Colony Capital -- said they would put up to $244 million in cash into the company as part of the restructuring.
"We believe the proposed restructuring plan is in the best interest of all our constituents," Chairman and Chief Executive Officer Frank Fertitta III said in the e-mailed statement.
The company would continue to operate its 13 casinos, including Palace Station, Texas Station, Red Rock Resort, Sunset Station and Boulder Station, without interruption under the proposal.
Station Casinos also operates the newly opened $662 million Aliante Station and Green Valley Ranch in partnership with the Greenspun Corp. under separate entities that would not be affected by the plan.
In its statement, the company, which was taken private about 15 months ago in a $8.5 billion buyout by the Fertittas and Colony Capital, said it has $350 million in cash to pay expenses, fund operations and to cover capital expenses.
The housing market bust and recession has hit Station Casinos hard. It has struggled to make debt payments while its revenues and cash flow have fallen as consumers have cut back sharply on gambling and other spending in Las Vegas.
The private equity buyout left the company with a $5.4 billion debt load, with bondholders holding nearly $2.3 billion of that debt.
Two-thirds of the company's bondholders will need to approve the restructuring proposal before it can be submitted to a bankruptcy court.
Under its plan, Station Casinos is proposing to buy back the bonds in exchange for new notes that would reduce the company's overall debt and its interest rate burden.
Senior bondholders would receive 40 cents on the dollar in new notes and 10 cents on the dollar in cash while subordinate bondholders would get 7 cents on the dollar in new notes and 3 cents on the dollar in cash.
If they accept, the bondholders would be issued a pair of 10 percent lien notes due 2014.
On Tuesday, the notes the bondholders now hold were trading as low as 12 cents and 2 cents, respectively.
Station Casinos said banks holding the remainder of the company's debt have agreed to the plan. Terms of those agreements were unavailable.
The statement also said the company decided not to make a $14.6 million interest payment that was due Monday on a $450 million note.
The note has a 30-day grace period, which ends March 3, and Station Casinos could make the payment and avoid being in default.
Tuesday's proposal is the second debt exchange offer the company has extended to its bondholders.
The company tried to buy back $450 million to $500 million in debt in November as part of a debt exchange that was rejected by bondholders.
The company found few takers willing to swap up to $459 million for unsecured notes worth a combined $2.088 billion, notes trading as low as 8 cents on the dollar.
The company's statement also included projections that said revenues for the fourth quarter, which ended Dec. 31, will be down 19 percent.
Quarterly revenues will be down to $290 million from $358 million in 2007, driving the company to post a $2 million loss, according to the preliminary estimates.
Cash flow for the quarter is expected to range between $97 million and $101 million, as much as a 26 percent decrease from $132 million in the same quarter 2007.
"It is no secret that current economic conditions in our country have had an adverse effect on Las Vegas in general and the casino business in particular," Fertitta said in the release.
"However, we believe the steps we have taken and those we are proposing to take will result in our company being well positioned for the future."
Colony Capital owns 75.9 percent of the company after contributing $2.7 billion to the buyout. The Fertittas hold a 24.1 percent equity investment after contributing nearly $870 million in stock to the transaction. The Fertittas control three of the five seats on the company's board of directors.
Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

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GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

Related story, Wynn makes cuts in pay and benefits as well:

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Feb. 04, 2009
Copyright ? Las Vegas Review-Journal

Wynn Resorts to cut staff hours, bonuses to avoid layoffs

By BENJAMIN SPILLMAN
LAS VEGAS REVIEW-JOURNAL Luxury casino operator Steve Wynn on Tuesday announced plans to cut hours, salaries, bonuses and 401(k) contributions for thousands of his Las Vegas employees in an effort to stave off layoffs.
The decision by Wynn Resorts Ltd. affects employees at Wynn Las Vegas and Encore, a $2.25 billion resort that opened just six weeks ago.

During a conference call, Wynn said the company will reduce spending on everything from energy to floral arrangements if it means preserving existing jobs and insurance benefits.
"Everybody makes a little less money but everybody keeps their jobs," Wynn said.
According to a statement, the company plans to:
? Reduce pay 15 percent for salaried employees making $150,000 or more and 10 percent for those making less effective Feb. 16.
? Reduce workweek to 32 hours for full-time, hourly employees.
? Suspend employer match to 401(k) accounts.
? Eliminate 2009 bonus accruals.
Wynn estimated the cuts, which have been planned for five to six weeks, would save the company $75 million to $100 million annually. He said cuts would apply to 9,500 full-time employees, including top management.
It comes after Wynn spent "a ton" of money to ensure a smooth opening for Encore.
"We carried huge extra staff. We also prepared a rather extravagant and far-reaching preopening advertising campaign," Wynn said.
Although Wynn says he considers the Encore a success, the reduction in the number of people visiting Las Vegas is clearly affecting his company.
Rooms in the new resort have been selling for less than $200 per night, a far cry from the boom of 2006 an 2007 when rooms at Wynn Las Vegas could fetch several hundred dollars per night.
Also, consumers aren't booking rooms until the last minute, which makes it harder for Wynn's managers to make financial projections.
"People with money are showing up at Wynn and Encore, but they are being a little more disciplined with their expenditures," Wynn said. "When there is a loss of consumer confidence like this, people behave in ways that are new to us."
The bargains at Wynn and Encore aren't helping other properties on the Strip.
Guests upgrading to Wynn's properties leave vacancies in second-tier hotels such as MGM Grand, Mandalay Bay or The Mirage.
Those properties must then poach customers from down-market properties such as Excalibur, Imperial Palace, the Rio and others.
That leaves those hotel-casinos scrambling for whatever business is left. It's a phenomenon that has led to some of the most aggressive room-rate wars in memory.
"They want us to get the rates up because right now we are pricing the Strip," Wynn said of his competitors on the Strip. "It is either my staff that is safe or somebody else's. If that's the way it goes, it is going to be my staff that is safe."
The cuts announced Tuesday won't affect workers at Wynn's properties in Macau.
Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.

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The Prophet

The Prophet

EOG Dedicated
Re: Station Casinos filing Chapter 11, others sure to follow

Reno Casino Closes Doors



The legendary Fitzgeralds casino in downtown Reno has been teetering on the brink for a while now, undergoing ownership changes and a number of planned redevelopments.

But after a 32-year run, the property is now closing its doors. It?s not what president Robert Cashell Jr., wanted. In December 2007 he told Global Gaming Business that the property was an integral part of the downtown redevelopment movement in the city. Over the last year, his opinions have changed.

?We certainly didn?t make this decision lightly,? he said. ?But given the status of the economy and where downtown redevelopment is headed, we think this property can play a strategic role in that future of Reno and now seems like the right time to undertake that direction.?

What that direction will be is unknown, but it is not likely to involve gaming. The best guess is that a smaller, boutique hotel will open at the site.

The announcement puts about 400 people out of work in a difficult economy. The casinos in Northern Nevada are already hurting as the economic situation has forced many people from the primary feeder market?Northern California?to stay closer to home and frequent tribal casinos instead.


.
 
The Prophet

The Prophet

EOG Dedicated
Re: Station Casinos filing Chapter 11, others sure to follow

Mesquite Running Dry



Twenty years after Randy Black helped transform Mesquite into a resort oasis, the desert town is falling on hard times.

Black?s vision for a resort community ?halfway between where you are and where you?re going? turned the sleepy town with a population of about 2,000 into a booming town of more than 20,000. There were about 1 million visitors coming through each year pumping money into the casinos and the city?s coffers.

But as the economy soured, so too has the outlook of Mesquite. Last month, Black laid off 350 workers at the Oasis and closed most of the property. The other properties, CasaBlanca and Virgin River Casino aren?t in much better shape.

If problems persist, observers expect Black Gaming to file for bankruptcy protection soon.



.
 
GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

Considering none of these corporate execs have an original thought and merely copy the others, once one starts filing bankruptcy and doors are shuttered I can see a very ominous domino effect come to fruition.
 
C

Cee

2
Re: Station Casinos filing Chapter 11, others sure to follow

Do u feel sorry for the greedy folks? Or do u just laugh like i am?
 
winkyduck

winkyduck

TYVM Morgan William!!!
Re: Station Casinos filing Chapter 11, others sure to follow

when i go to vegas to visit sis i rarely gamble there any more because of.........

single and double deck BJ paying a "Whopping 6:5" (Sign at one Vegas hotel - i think Bally's - not sure - doesn't make a diff either), or 450 deck shoes for BJ or Sportsbooks that move the line against you once you tell them what side you wanna play or take such low limits it's not worth making a bet there at all

when Vegas stops "bending over" people who wish to play games and do so without getting fucked in the ass w/o any lube - i will shed some tears for them but until then the only reason i care about anything there is my sis and her family live literally around the corner from the Red Rock
 
O'Royken

O'Royken

EOG Dedicated
Re: Station Casinos filing Chapter 11, others sure to follow


Fuck You Nevada!

I am keeping Californians in California!
 
The Prophet

The Prophet

EOG Dedicated
Re: Station Casinos filing Chapter 11, others sure to follow

As businesses go, so do governments, as governments go, so do living standards, as living standards go, desperation takes over motivating people into taking matters in their own hands regardless of consequences as a means of survival. Crime will skyrocket, chaos will ensue, and Marshall Law will be implemented, while the streets will flow red with the blood of the hopeless.

Operation Ghetto.


.
 
GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

STN just delaying the inevitable in the latest news:

Mar. 03, 2009
Copyright ? Las Vegas Review-Journal

BANKRUPTCY PLANS: Station granted extension

Debt holders allow more time for proposal on restructuring

By ARNOLD M. KNIGHTLY
LAS VEGAS REVIEW-JOURNAL
Station Casinos? bankruptcy plans have been put on hold ? for now.
The locals casino company and debt holders reached an agreement that will give the gaming company another five weeks to negotiate a restructuring plan under terms of agreements released this morning.

The terms of the agreements, called a forbearance agreement, with holders controlling the company?s $5.4 billion debt were filed with the Securities and Exchange Commission.
The announcement came hours after a midnight Monday deadline passed for bondholders controlling $2.3 billion in notes to vote on a proposed restructuring that would have seen them recover between 10 cents and 50 cents on the dollar in new notes and cash.
Trading on the senior notes was at 31 cents on the dollar Monday, while subordinate notes were valued at 3 cents on the dollar, data from the National Association of Securities Data show.
The voting deadline was extended until April 10 at 5 p.m. EST, and the terms of the forbearance agreement expire April 15.
The original plan, announced Feb. 2, would have seen the company enter into a voluntary Chapter 11 bankruptcy and the gaming company?s owners ? the Fertitta family and real estate investment firm Colony Capital ? infusing $244 million in cash into the company as part of the restructuring plan.
Station Casinos said the agreements ?will provide the company with additional time to continue discussions regarding terms of its plan of reorganization,? according to a statement.
An earlier debt exchange, which offered between 20 cents and 54 cents on the dollar in new bonds and 3 cents on the dollar in cash for senior lenders, was rejected by bondholders in November.
That proposal did not include any kind of cash infusion by the company?s owners.
The agreement states that bondholders will not claim defaults on two skipped debt payments scheduled to expire this month: a $14.6 million payment due today and a $15.5 million debt payment expiring March 17.
The agreement does not discuss a $950 million offer made Feb. 23 by Boyd Gaming Corp. for a majority of Station Casinos? operations. Debt analysts valued Boyd Gaming?s offer a better deal for bondholders, meaning Station Casinos might be forced to increase its offer.
The company has been struggling to pay expenses incurred by its $8.8 billion takeover by the Fertitta family and Colony Capital in November 2007. Since then, the economy has soured, and the revenues of Station Casinos and other gaming companies have tumbled as consumers curbed spending.
Primm operator Herbst Gaming and Black Gaming, which owns three casinos in Mesquite, have been working under forbearance agreements since late last year.
Station Casinos, which has not released its year-end earnings, said Feb. 2 it had $350 million in cash to service operations and fund operations.
 
FairWarning

FairWarning

Bells Beer Connoisseur
Re: Station Casinos filing Chapter 11, others sure to follow

Doberman, do you think Boyd buys Stations out? Where did Boyd get the money?
 
Mr. Smith

Mr. Smith

EOG Master
Re: Station Casinos filing Chapter 11, others sure to follow

Wynns casinos are empty, Trumps tower across the street is very nice but a ghost town.

No idea when City Center opens who they think is going to show up.
 
GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

FW,
I don't think so. They are going down as well. Only saving grace is they do not have the ridiculous debt-load others do and they were smart enough to know to cut their losses with the Stardust project.

Why anyone would want to buy shitholes like Fiesta, Texas, Santa Fe at this point is beyond me. They are worth about $3 apiece in this current market.
 
C

cheapseats

EOG Master
Re: Station Casinos filing Chapter 11, others sure to follow

Marketwatch has article on MGM Mirage about to go tits up today.
 
RealSlimShady

RealSlimShady

EOG Dedicated
Re: Station Casinos filing Chapter 11, others sure to follow

MGM, LVS and Harrah's are all going bankkrupt....matter of time. Too much debt. Among the big players, I think only WYNN will survive.
 
GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Mar. 04, 2009
Copyright ? Las Vegas Review-Journal

Station Casinos refuses Boyd offer

Company to proceed with restructuring plan

By ARNOLD M. KNIGHTLY
LAS VEGAS review-journal Station Casinos' board of directors on Tuesday officially rejected Boyd Gaming Corp.'s unsolicited $950 million offer for a majority of Station's assets.
It is "in the best interest of the company and its stakeholders to proceed with the company's restructuring plan," Station said in a letter sent to its main rival in the locals gaming industry.

Rob Stillwell, Boyd's vice president of corporate communications, said the company will respond to Station's rejection letter today.
But he said Tuesday afternoon that "we remain interested in acquiring some or all of the assets of Station Casinos."
Bill Lerner, a gaming analyst with Deutsche Bank, said Station's rejection of the buyout offer makes sense.
"The reasoning on why they rejected this current offer makes sense to me," Lerner said. "They feel there is notable risk that the deal might not close, and if that happens, they've disrupted the prepackaged proposal, and that changes everything."
On Feb. 2, Station announced a "prepackaged" bankruptcy plan that would give bondholders who hold $2.3 billion of Station's debt between 10 cents and 50 cents on the dollar in new notes and cash.
Under Station's plan, the company would enter into a voluntary Chapter 11 bankruptcy and the gaming company's owners -- the Fertitta family and real estate investment firm Colony Capital -- would put $244 million in cash into the company.
An earlier debt exchange was rejected by bondholders in November. That proposal did not include any kind of cash infusion by the company's owners.
Station's rejection came on the same day that the company announced it had reached agreements with most of its debt holders to extend a deadline to vote on the company's bankruptcy proposal.
The agreements "will provide the company with additional time to continue discussions regarding terms of its plan of reorganization," Stations said in a statement.
The agreement gives Station and its debt holders until April 10 to vote on the proposed debt swap and restructuring.
The agreement was signed hours prior to Monday's midnight deadline for the bondholders to vote on the restructuring plan.
Mike Sullivan, a finance professor at the University of Nevada, Las Vegas, said Boyd Gaming's offer made Station's deal less attractive for bondholders.
"Station is asking bondholders for another month to figure things out," Sullivan said. "I suspect (Station Casinos) will sweeten the pot a little bit, if they can."
Lerner suggested Station might have rejected the buyout offer because it could be "hypersensitive" to sharing company finances and other confidential information with its biggest competitor in today's economic environment.
Boyd Gaming, however, could come back with another offer that addresses some of Station's concerns, Lerner said.
He said Station's board will judge offers based on what's best for the company, not what's best for the Fertitta family, which founded the company in 1976 and owns 25 percent of the company but controls three of the board's five seats.
The letter to Boyd Gaming, signed by Chairman and Chief Executive Officer Frank Fertitta III, said Station will not take "any steps towards pursuing, a sale of all or any portion of the company's assets."
Station Casinos owns 13 casino properties -- including Red Rock Resort, Sunset Station, Palace Station and Boulder Station -- in Clark County.
The company is also partner in five 50-50 joint ventures with Greenspun Corp., including Green Valley Ranch and the newly opened Aliante Station in North Las Vegas.
Boyd offered to buy Santa Fe Station, Texas Station, the 94-acre Wild Wild West site on Tropicana Avenue west of Interstate 15, two Fiesta properties, the Greenspun joint ventures and several nonhotel casinos.
The deal would leave Station Casinos with four hotel-casinos carrying $2.5 billion of debt.
Station Casinos cited the "highly conditional nature" of Boyd Gaming's offer, as well as the risks "in sharing sensitive and confidential information with a significant competitor" and potential harm to "stakeholders" as reasons for rejecting the offer.
"The board also considered the potential harm that would result to the company's stakeholders if such a proposal was delayed or could not be completed," the letter read.
The letter, addressed to Boyd Gaming Executive Chairman Bill Boyd and CEO and President Keith Smith, expressed concern about "Boyd's potential inability to perform due to its own financial position."
Boyd Gaming closed trading Tuesday at $3.69 on the New York Stock Exchange, down 9 cents, or 2.38 percent. Shares of Boyd were trading at $26.25 a year ago before falling to $2.81 during last November's stock market crash.
Boyd Gaming posted a net loss of $223 million last year, driven by 12.1 percent decrease in revenues to $1.8 billion from $2 billion in 2007.
Boyd Gaming now has a $2.6 billion debt load, $2.1 billion of which doesn't mature until 2012.
Boyd Gaming operates nine casinos in Las Vegas and Henderson including Sam's Town on Boulder Highway, the Suncoast in Summerlin and The Orleans on Tropicana Avenue.
The company also owns six properties in Louisiana, Mississippi, Illinois and Indiana, and has a 50 percent stake in the Borgata in Atlantic City.
The terms of Station's new forbearance agreement, which expires April 15, reveal the company skipped its third debt payment in a month.
The agreement, however, prevents bondholders from declaring default on the missed payments -- a $24 million debt payment due March 1 with a 30-day grace period to March 31, along with $14.6 million and $15.5 million payments skipped in February -- prior to April 15 when the forbearance agreement expires.
Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

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GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

All over but the shouting at MGM as well, didn't we know all his over a year ago?:

GAMING:
MGM Mirage?s cash crunch

With credit line tapped out, bonds and loans coming due, Chapter 11 seen as risk


<!-- end story-header --> Steve Marcus
In spite of a worsening cash cruch for developer MGM Mirage, CityCenter will be mostly completed by the end of the year, spokesman Alan Feldman says.

<!-- close leadPhoto -->By <CITE>Liz Benston</CITE>
Tue, Mar 3, 2009 (2 a.m.)
CityCenter Construction

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<!-- /text-inline -->Beyond the Sun

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<!-- /text-inline -->Just months ago MGM Mirage, with billions of dollars in cash at its disposal, was thought to be well braced for the recession.
But last week?s news that MGM Mirage has tapped the remaining money from a $4.5 billion credit line is adding anxiety among investors for the company?s future.
And in a sign of how swiftly the nation?s economic headwinds have stiffened, analysts now say Nevada?s largest employer is at risk of filing for Chapter 11 bankruptcy protection as it enters the final stretch of building the $9 billion CityCenter. Major loans are coming due over the next two years even as the company is on the hunt for another $1.2 billion to finance completion of the project.
MGM Mirage spokesman Alan Feldman declined to comment on bankruptcy concerns or to elaborate beyond the company?s announcement Friday.
Analysts say there is a slim chance that, because of dwindling cash, MGM Mirage will have to delay completion of CityCenter.
One well-placed source said that was one of many possibilities being considered by the company until banks free up money.
But Feldman said that with the exception of the Harmon hotel, which is expected to open in 2010, MGM Mirage ?continues to work on CityCenter? for a late 2009 opening. Dubai World remains a committed partner, he added.
The company has not yet reported fourth-quarter earnings. In the third quarter, which worsened from the first and second quarters, earnings fell about 30 percent from a year earlier. Including the effect of cost cuts and removing one-time events that don?t relate to performance, earnings fell about 14 percent in the third quarter.
That hardly sounds like a doomsday scenario for a company that generates more than $6 billion in cash each year.
And yet, it?s bad news for MGM Mirage, which has billions more in loans coming due in the next few years while trying to borrow more money in the tightfisted capital market.
MGM Mirage has $1.3 billion in bonds due in 2009 and another $1.2 billion in bonds due in 2010. On top of that, the company has a $7 billion bank loan coming due in 2011, along with another $532 million in bond maturities.
That?s why the three major bond rating agencies, which assess bankruptcy risk, jumped at MGM Mirage?s announcement Friday that the company would borrow $842 million in cash remaining under a $4.5 billion revolving credit line because of the turbulent credit markets and ?uncertain state of the global economy.?
MGM Mirage stock plunged to an all-time low of about $3 per share Monday, down about 95 percent from a year ago.
The rating agencies, fearing that MGM Mirage is burning though the cash it needs to pay mounting debts, said it is running out of options to secure additional money.
?It?s unfortunate that the company has so many near-term maturities at a time when earnings are so weak and the credit markets have seized up,? said Peggy Holloway, vice president and senior credit officer of Moody?s.
Standard & Poor?s and Fitch Ratings said MGM Mirage is likely to default on its bank loan this year because the company?s debts are too high, relative to earnings.
Although such defaults don?t necessarily lead to an immediate Chapter 11 filing but rather a new round of bank negotiations, some analysts say the company?s debts are so massive it may need to restructure them, which is most efficiently done in bankruptcy court.
Unlike other industries, where assets are commonly liquidated to pay creditors, major Las Vegas casinos have continued to operate in Chapter 11, either under the same owners or new owners. Lenders sometimes receive equity in a company as debts are forgiven.
Even if the company obtains waivers from its banks, amends the terms of its loan or obtains the remaining cash needed for CityCenter, the company?s capital structure ?may be unsustainable? given deteriorating business trends in Las Vegas, Fitch Ratings said in downgrading the company?s credit ratings Friday.
Fitch expects business to remain poor on the Strip throughout 2009 and likely into 2010. S&P forecasts a 25 percent drop in company earnings this year.
Typically, banks will negotiate with companies to amend the terms of their bank agreements with the understanding that a company can still generate significant cash to pay debts, though perhaps not as much as before. MGM Mirage and other casino companies have negotiated such amendments during the downturn, allowing them to incur higher debts in exchange for a higher interest rate.
The company has cut costs by hundreds of millions of dollars ? a reaction to slower business as well as a recognition of future cash needs.
As the economy worsens and banks face their own mortality, analysts say they will be less likely to negotiate with companies that need cash the most. Analysts say MGM Mirage is negotiating with its banks and considering selling casinos to raise money.
Delaying the opening of CityCenter would make sense only if the company thinks revenue in the down economy would not sustain operating costs ? an unlikely scenario, experts say.
On the other hand, MGM Mirage may have few options if it is unable to secure $1.2 billion in financing needed to complete the project and 50 percent owner Dubai World ? facing its own concerns as the global downturn cools Dubai?s red-hot real estate market ? is unwilling or unable to put in more equity.
 
GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

Related:

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Mar. 04, 2009
Copyright ? Las Vegas Review-Journal

SEC FILING: MGM Mirage in talks with lenders

Company says it will be in default if it can't alter payment structure

By HOWARD STUTZ
LAS VEGAS REVIEW-JOURNAL MGM Mirage, the Strip's biggest casino operator and the state's largest private employer, could be facing a bankruptcy filing if it can't renegotiate better repayment terms with its lenders covering some $7 billion in loans.
In a filing Tuesday with the Securities and Exchange Commission, the company that operates 10 Strip hotel-casinos and is building the $9.1 billion CityCenter said it was discussing waivers or amendments with its lenders.

MGM Mirage said it would be in default under its senior secured credit facility if it cannot negotiate a better repayment structure. The action could filter down and put all of MGM Mirage's debt, which totals roughly $13.5 billion, into default.
In the filing, the company blamed the recession and the steep drop in consumer spending at casinos for its concerns about not being able to make its debt payments.
"If (MGM Mirage) is unable to negotiate such a waiver or amendment, a majority of the lenders under the senior credit facility could accelerate repayment of borrowings ... cross defaults could be triggered," the company wrote in the SEC document.
Wall Street has begun speculating that MGM Mirage might have to file for Chapter 11 bankruptcy protection to force a restructuring of its bank loans and corporate debt.
MGM Mirage has also been seeking the final $1.2 billion in financing to complete CityCenter, which is scheduled to open in October. The 4,004-room Aria, CityCenter's centerpiece hotel-casino, is scheduled to open in December.
"Many lenders are not being flexible with gaming operators. ... We believe MGM Mirage is going to have significant difficulty in reaching an agreement with its respective banks," Macquarie Securities gaming analyst Joel Simkins told investors. "Unfortunately, in a worst case scenario, should MGM Mirage need to restructure, we believe this tipping event will place another cloud over the sector."
Simkins worried the stock prices of other casino operators, including Wynn Resorts Ltd. and regional casino operators, would suffer. Shares of MGM Mirage sank to a 52-week low of $2.62 on the New York Stock Exchange on Tuesday, down 43 cents, or 14.1 percent.
On Monday, JP Morgan gaming analyst Joe Greff reduced his estimates for MGM Mirage's quarterly revenue and cash flow. He alluded to a potential company restructuring.
"We would not rule out a (bankruptcy) filing as the ultimate, and perhaps only, lever from which MGM Mirage can negotiate with its banks, at least until asset sales are announced," Greff said in a note to investors. "We believe the company is in active discussions with potential buyers of Strip assets to raise capital and had hoped that it would report any progress there with its fourth-quarter results."
In December, MGM Mirage agreed to sell Treasure Island to former New Frontier owner Phil Ruffin for $775 million. The Gaming Control Board is expected to address the matter today.
MGM Mirage spokesman Alan Feldman wouldn't speculate Tuesday about any potential outcomes.
"We're engaged in ongoing discussions with our lenders," Feldman said. "Today's filing doesn't affect CityCenter. It's business as usual. We're focused on providing an unsurpassed experience for every one of our guests."
MGM Mirage notified the SEC it was delaying its year-end report for several weeks. The company said it was still assessing its financial position and liquidity needs because souring economic conditions have impacted MGM Mirage's operating results.
Last week, MGM Mirage borrowed the remaining $842 million from its revolving credit line to pay for general corporate purposes. Feldman said the company now has more than $1 billion in cash on its balance sheet.
Like other casino operators, MGM Mirage has undertaken numerous cost-cutting measures over the past 14 months to bring expenses into line amid sinking revenues and cash flow.
The biggest drain has been CityCenter. The project's Harmon Hotel was scaled back and delayed until 2010.
Dubai World, the investment arm of the Persian Gulf state, invested almost $6 billion in the company in 2007 to acquire half ownership in CityCenter and almost 10 percent of MGM Mirage.
Deutsche Bank gaming analyst Bill Lerner said at an investors conference in New York that MGM Mirage will take a number of steps to shore up its finances before a restructuring. The company has properties in Detroit and Biloxi, Miss., along with several Strip casinos, that could be put on the market. He said MGM Mirage and Dubai World might sell part of CityCenter.
"They could sell a hotel tower or a residential hotel tower to a hotelier," Lerner said, adding the company has enough liquidity to resolve its 2009 and 2010 debt maturities, which total about $2.1 billion.
"(The company) needs to quell concerns that they are going out of business," he said.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

Evil empire is staggering, referee is looking closely to stop it:

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<!--Article Goes Here--><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Mar. 06, 2009
Copyright ? Las Vegas Review-Journal

Analyst predicts Harrah's will land in bankruptcy court this year

By ARNOLD M. KNIGHTLY
LAS VEGAS REVIEW-JOURNAL A bond analyst said Thursday she doubts Harrah's Entertainment's latest debt swap offer will be successful and predicted the gaming company could end up in bankruptcy court before the year is out.
"We think this latest restructuring is an attempt to rearrange the deck chairs on the Titanic," Barbara Cappaert, a bond analyst with KDP Investment Advisors, said. "The company will very likely throw in the towel and reduce debt via a debt/equity restructuring (or bankruptcy) later this year to streamline its balance sheet."

Harrah's on Wednesday said it wanted to swap an unspecified amount of debt for $2.8 billion in lower value/ higher interest notes that would mature in nine years.
Harrah's owners, private equity firms Apollo Management and TPG Capital, are offering to exchange the notes issued in December for $250 million, or 37 cents on the dollar for notes tendered and accepted by April 17.
A price of 34 cents on the dollar would be accepted for notes tendered past the date.
Cappaert described the owners' offer as "curious," saying it could tilt a future bankruptcy in their favor.
"The investment ... would give Apollo ... control of up to $675 million face amount of the December issued debt," she wrote.
"This would represent one-third of those new bonds and that, interestingly enough, would be enough to block any restructuring plan in bankruptcy."
The debt exchange offer included giving as much as $150 million in cash to holders of second priority notes maturing in seven and nine years.
The offer expires midnight EST on April 1, however, a 3 cents on the dollar premium in new notes will be paid to investors who accept the offer before 5 p.m. EST on March 18.
Harrah's spokeswoman Jacqueline Peterson said the company is "in a quiet period" and would not comment beyond the release announcing the offer.
Cappaert, however, said she doubts the offer will get the response that Harrah's would like.
With the new debt likely to trade at the levels of the redeemed notes, Harrah's needs to offer investors a better package, she said.
Some investors holding priority bonds in the debt swap seemed to react positively to the news.
Harrah's near-term bonds climbed from between 241/2 cents on the dollar prior to the announcement to 32 cents on the dollar Thursday, according to the Financial Industry Regulatory Authority.
Bonds with lower priority remained stable, holding value as low as 6 cents on the dollar.
Harrah's on Thursday also released selected preliminary year-end financial numbers.
The company estimated cash flow of between $333 million and $347 million for the fourth quarter ended Dec. 31.
The results would equal at least a 12 percent drop from cash flow a year ago.
Revenues for the year are estimated between $10.08 billion and $10.2 billion, which would be a drop of at least a 6 percent from 2007.
The company was able to successfully reduce its $24.1 billion debt load by $1.16 billion through a debt exchange completed in January.
Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

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GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

These guys still waiting for the greater fool to show up. "Show's over folks, moose next to the 'Welcome to Las Vegas' sign should have told ya":

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Mar. 06, 2009
Copyright ? Las Vegas Review-Journal

CITYCENTER PROJECT: MGM in hunt for financing after talks collapse

Company pursuing new options

By HOWARD STUTZ
LAS VEGAS REVIEW-JOURNAL It's back to square one for MGM Mirage.
After discussions with Deutsche Bank collapsed late Wednesday, the cash-strapped casino operator will have to look elsewhere for the final $1.2 billion in financing needed to complete its $9.1 billion CityCenter development.

The news, coupled with MGM Mirage's announcement Tuesday that it could default on its $7 billion senior secured credit facility and be labeled a "going concern" by its independent accountants, didn't sit well with Wall Street. Speculation about the financial health of the Strip's largest casino operator widened.
"We stayed positive on MGM Mirage since we believed the company had more options at its disposal to navigate through this economic downturn versus its peers," Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said in a note to investors. "Concerns as to what it will do in order to ease liquidity continue."
MGM Mirage spokesman Alan Feldman said the company would "pursue options that are far better than Deutsche Bank presented" in obtaining financing for CityCenter, which it owns in a 50-50 joint venture partnership with Dubai World, the investment arm of the Persian Gulf state.
Deutsche Bank reportedly wanted MGM Mirage to operate or take an ownership stake in the unfinished $3.9 billion Cosmopolitan project, which is being built on an 8.5-acre site between CityCenter and Bellagio.
Deutsche Bank, which acquired the Cosmopolitan for $1 billion at a foreclosure sale, has been seeking an operator for the project. A spokesman for Deutsche Bank declined comment.
The company said a default on its credit line could lead to a default on its entire $13.5 billion debt load. MGM Mirage delayed its year-end earnings report until March 17 and is negotiating with its lenders to seek better repayment terms. Some analysts believe the company could be forced into bankruptcy to restructure its debt. Others believe the company has many options to pursue.
Shares of MGM Mirage sank to never-before-seen lows Thursday. The price per share closed at $1.89 on the New York Stock Exchange, down 32 cents or 14.48 percent.
Macquarie Securities gaming analyst Joel Simkins said MGM Mirage's financial woes have the potential to drag down the rest of the gaming sector. He thought the company would have been successful in finding CityCenter funding late last year but credit has tightened in the past six months.
"While there is always a possibility that MGM Mirage could pull off a miracle near-term, we think that the capital markets remain closed to the company and that lenders will force the company into a restructuring given its concentration in Nevada, a market we believe will remain depressed for at least a few years," Simkins said in an investors note.
MGM Mirage owns 10 Strip casinos but is selling Treasure Island for $775 million. The deal is expected to close at the end of the month. The company is reportedly shopping other Strip assets, including hotel-casinos in Detroit and Mississippi.
One analyst, who asked not to be named, said the company could resolve about $2.1 billion in debt issues that come due in 2009 and 2010. CityCenter remains the largest matter on the horizon; resolving the last piece of financing would alleviate concerns about MGM Mirage.
The 76-acre project, which includes the 4,004-room Aria hotel-casino, multiple nongaming hotels, high-rise residences, and a large entertainment, retail and dining complex, is expected to begin opening in October.
On Wednesday, MGM Mirage Chief Financial Officer Dan D'Arrigo tried to assure the Gaming Control Board the company had bolstered its financial position. MGM Mirage's balance sheet now has approximately $1 billion in cash. He said the potential default didn't affect continuing construction work at CityCenter.
Also, MGM Mirage Chairman and CEO Jim Murren sent a six-paragraph e-mail to MGM Mirage's 65,000 workers Tuesday, trying to assure employees that the company's business health was sound.
"We are continuing to operate our properties and deliver the service and experience that our guests and clients have come to expect," Murren wrote. "Our operations, while impacted by the downturn in the national economy, remain profitable."
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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GreenDoberman

GreenDoberman

2
Re: Station Casinos filing Chapter 11, others sure to follow

more related news, the local fishwrap is just about a year or so behind in recognizing the news:

Mar. 08, 2009
Copyright ? Las Vegas Review-Journal

INSIDE GAMING: It's all come tumbling down
It seems as if we have a front row seat to Armageddon.
Last week, MGM Mirage told investors it might be labeled a "going concern" by auditors and could default on $13.5 billion in debt. Harrah's Entertainment offered a second debt trade to bondholders to reduce the company's approximately $23 billion in obligations.

Wall Street is speculating that one or both of the Strip's largest casino operators could wind up in bankruptcy court.
MGM Mirage has 10 Strip hotel-casinos. Harrah's runs eight Strip hotel-casinos. It's possible most of the major hotel-casinos between Spring Mountain Road and Russell Road -- including Caesars Palace, Bellagio, MGM Grand, Paris Las Vegas, Flamingo and Mandalay Bay -- might be considered bankrupt.
Deutsche Bank gaming analyst Bill Lerner tried to quell notions about an MGM Mirage bankruptcy. He said the company is taking steps to stay off the court's docket.
A balance sheet with cash flow, almost $1 billion in cash and $775 million from selling Treasure Island, gives MGM Mirage enough liquidity to cover its debt maturities in 2009 and 2010, Lerner said.
MGM Mirage has other balance sheet options that don't involve the court.
Meanwhile, Phil Ruffin isn't deterred by any of the negativity. At 73, he's almost back on the Strip.
Ruffin made a fortune in oil and real estate when he bought the New Frontier for $167 million in 1998. He sold the hotel-casino nine years later for $1.2 billion. His style made believers out of Las Vegans.
Ruffin earned preliminary approval last week to buy Treasure Island. Gaming regulators said it was good to have him back.
That's the attitude we need.
***
Gaming company stock prices have been pounded in the last 14 months. Just ask MGM Mirage majority shareholder Kirk Kerkorian.
At the market's peak, the 91-year-old Kerkorian's 54 percent stake in the company was valued at $15 billion. A year ago it was down to $9.6 billion. Last week, the value of Kerkorian's stock had shrunk to less than $400 million.
In October 2007, MGM Mirage was $99.75 per share. The current 52-week high is $64.85 on March 25. On Thursday, the casino operator fell to an all-time low of $1.89.
***
 
C

cheapseats

EOG Master
Re: Station Casinos filing Chapter 11, others sure to follow

I was in Laughlin over the weekend, and for early March, it was fairly busy, tables, restaurants, etc. Of course alot of snow birds and retired folks this time of year, living on pensions, etc., but also a decent amount of the younger crowd, as well.
 
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