Las Vegas hotel operator MGM Mirage has announced that it has concluded the first stage of its $3 billion financing package needed to conclude the CityCenter project on the Las Vegas Strip. MGM has secured a total of $1.8 billion and it is expected to reach the $3 billion in financing as banks start submitting additional commitments. MGM Mirage Chief Financial Officer Dan D'Arrigo said CityCenter has received additional commitment letters for more than $500 million, these commitments are expected to be added to the facility once the project is finally completed. The credit facility consists of an initial $250 million loan with the remaining amount paid in form of term loans. This facility is led by Bank of America, Royal Bank of Scotland, UBS, BNP Paribas, Sumitomo Mitsui, Deutsche Bank, Morgan Stanley, and the Bank of Nova Scotia.

As announced by both companies, MGM MIRAGE and Dubai World will keep looking for agreements with other financial institutions to gather the remaining funds through a syndication process starting this same week.

"Even in the current difficult lending environment, strong well-conceived projects attract financing, CityCenter is such a project. We appreciate the strong support CityCenter has received from these participating financial institutions. We and our partner are actively in discussions with additional financial institutions to obtain the additional funding of the credit facility and are receiving strong interest in the syndication process set to launch this week." said Dan D'Arrigo, Executive Vice President and CFO of MGM MIRAGE.

But even when MGM has secured this critical funding, MGM Mirage stocks continued to fall for third in a row, however, MGM’s announcement has significantly alleviated questions concerning the future of the CityCenter project, which is expected to open its doors by mid 2009.

"On the positive side, these announcements show that the banks are willing to work with MGM Mirage to relieve potential balance sheet pressure. However, the credit facility amendment is also a potential signal that MGM Mirage will likely increase the leverage on its balance sheet and operating conditions remain challenging." said Goldman Sachs’ stock analyst Steven Kent in a research note released to investors.