Possible MGM Bankruptcy?

Recently investors in the MGM felt there may be a problem at the MGM Mirage. MGM’s 4th quarter earnings report was long overdue and actually the release had not even been scheduled.

Last week MGM made the announcement that it was tapped out of their $4.5 billion revolving credit facility, as it was down to only $842 million. After the announcement the 3 main credit reporting agencies, which are Moody’s, Fitch, and Standard & Poor’s, all downgraded the credit rating as well as individual debt ratings of MGM.

Recently the owner of the Bellagio, Mirage, and MGM Grand properties announced that they were not able to submit financial findings to the SEC, as they were still in the process of assessing their condition financially. In their notice to the SEC, MGM reported that they thought it would be a breach of their loan agreements this year, which would be a default on their senior debt and it would also potentially bring on defaults on other debt instruments.

The filing also stated that MGM was in current negotiations to amend their senior debt agreements. However, they did not have any assurances that the negotiations would amount to anything. March 17th of this year is the new date that MGM will release their earnings announcement.