e424b2
The
information in this prospectus supplement is not complete and
may be changed. This prospectus supplement and the accompanying
prospectus is not an offer to sell the notes and is not a
solicitation of an offer to buy the notes in any jurisdiction
where the offer or sale is not permitted.
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Filed pursuant to Rule 424(b)(2)
Registration No. 333-133925
SUBJECT TO COMPLETION, DATED
MAY 8, 2007
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus Dated May 9, 2006)
$
% Senior Notes
due 2016
We are one of the largest gaming companies in the world. We
own what we believe to be the finest collection of casino
resorts in the world.
We are offering $ million
of our % senior notes due 2016. We will pay
interest on the notes
on
and 2016 of each year, commencing
on ,
2007. The notes will mature
on ,
2016.
We may redeem the notes in whole or in part at any time prior
to their maturity at the redemption price set forth in this
prospectus supplement.
The notes will be guaranteed by substantially all our
subsidiaries. The notes will be general unsecured senior
obligations of us and each guarantor, respectively, and will
rank equally with or senior to all existing or future
indebtedness of us and each guarantor, respectively.
We intend to use the proceeds to repay a portion of the
outstanding amount under our $7.0 billion senior credit
facility and for general corporate purposes.
Investing in the notes involves risks. See Risk
Factors beginning on
page S-5.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement and the
accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
None of the Nevada Gaming Commission, the Nevada Gaming Control
Board, the New Jersey Casino Control Commission, the New Jersey
Division of Gaming Enforcement, the Michigan Gaming Control
Board, the Mississippi Gaming Commission, the Illinois Gaming
Board nor any other gaming authority has passed upon the
accuracy or adequacy of this prospectus supplement, or the
accompanying prospectus, or the investment merits of the
securities offered. Any representation to the contrary is
unlawful. The Attorney General of the State of New York has not
passed upon or endorsed the merits of this offering. Any
representation to the contrary is unlawful.
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Per Note
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Total
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Initial public offering price(1)
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%
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$
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Underwriting discount
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%
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$
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Proceeds, before expenses, to MGM
MIRAGE(1)
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%
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$
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(1) |
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Plus accrued interest, if any. |
The underwriters expect to deliver the notes to investors in
book-entry form on or
about ,
2007.
Joint Book-Running Managers
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Banc of America Securities
LLC
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Prospectus Supplement dated , 2007
This prospectus supplement and the accompanying prospectus
are part of a shelf registration statement that we
filed with the SEC. By using a shelf registration statement, we
may sell any combination of the securities described in the
prospectus from time to time in one or more offerings. You
should rely only on the information or representations
incorporated by reference or provided in this prospectus
supplement and the accompanying prospectus. We have not
authorized anyone to provide you with different information. If
anyone provides you with different or inconsistent information,
you should not rely on it. If the description of this offering
varies between this prospectus supplement and the accompanying
prospectus, you should rely on the information contained in or
incorporated by reference in this prospectus supplement. You may
obtain copies of the shelf registration, or any document which
we have filed as an exhibit to the shelf registration or to any
other SEC filing, either from the SEC or from the Secretary of
MGM MIRAGE as described under Where You Can Find More
Information. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should not assume that the information in this
prospectus supplement and the accompanying prospectus is
accurate as of any date other than the date printed on their
respective covers.
TABLE OF
CONTENTS
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Page
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Prospectus Supplement
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S-1
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S-2
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S-5
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S-6
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S-6
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S-7
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S-8
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S-23
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S-24
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S-24
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S-24
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Prospectus
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About This Prospectus
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1
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Where You Can Find Additional
Information
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1
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Incorporation Of Information By
Reference
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1
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Use Of Proceeds
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2
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Ratio Of Earnings To Fixed Charges
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2
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Description of Securities
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2
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Legal Matters
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3
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Independent Registered Public
Accounting Firm
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3
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FORWARD-LOOKING
STATEMENTS
This prospectus supplement and the accompanying prospectus
include forward-looking statements that are subject
to risks and uncertainties. In portions of this prospectus
supplement and the accompanying prospectus, the words
anticipates, believes,
estimates, seeks, expects,
plans, intends and similar expressions,
as they relate to us or our management, are intended to identify
forward-looking statements. Although we believe that the
expectations reflected in such forward-looking statements are
reasonable, and have based these expectations on our beliefs as
well as assumptions we have made, such expectations may prove to
be incorrect. Important factors that could cause actual results
to differ materially from such expectations are disclosed in
this prospectus supplement and the accompanying prospectus
including, without limitation, those set forth under Risk
Factors, beginning on
page S-5.
All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by our cautionary statements. The
forward-looking statements included or incorporated herein are
made only as of the date of this prospectus supplement, or as of
the date of the documents incorporated by reference. We do not
intend, and undertake no obligation, to update these
forward-looking statements.
S-1
SUMMARY
This summary is not complete and may not contain all of the
information that may be important to you. You should read the
entire prospectus supplement and the accompanying prospectus
carefully, as well as the documents incorporated by reference,
for a more complete understanding of this offer and the notes.
In this prospectus supplement, except where the context
otherwise requires, we will collectively refer to MGM MIRAGE and
its direct and indirect subsidiaries as MGM MIRAGE,
we, our and us.
MGM
MIRAGE
We are one of the largest gaming companies in the world. We own
what we believe to be the worlds finest collection of
casino resorts. We own and operate Bellagio, MGM Grand, Mandalay
Bay, The Mirage, Luxor, Treasure Island (TI), New
York-New York, Excalibur, Monte Carlo, Circus Circus-Las Vegas
and
Slots-A-Fun
located in Las Vegas, Nevada. We also own and operate Circus
Circus-Reno, located in Reno, Nevada; Gold Strike, located in
Jean, Nevada; Railroad Pass, located in Henderson, Nevada;
Colorado Belle and Edgewater, located in Laughlin, Nevada; MGM
Grand Detroit, located in Detroit, Michigan, Gold Strike,
located in Tunica County, Mississippi; and Beau Rivage, a
beachfront resort located in Biloxi, Mississippi. Beau Rivage
reopened on August 29, 2006 after being closed for one year
due to extensive damage from Hurricane Katrina.
We are also a 50% owner of Silver Legacy, located in Reno,
Nevada, a 50% owner of Borgata, a destination casino resort on
Renaissance Pointe in Atlantic City, New Jersey and 50% owner of
Grand Victoria, a riverboat casino in Elgin, Illinois. We also
have a 50% interest in the MGM Grand Macau under construction in
Macau S.A.R. We are developing CityCenter, a multi-billion
dollar mixed-use urban development project on the Las Vegas
Strip. We are also developing a permanent hotel-casino facility
in Detroit, Michigan; which is expected to replace the current
interim casino facility in late 2007. In addition, our other
operations include the Shadow Creek golf course in North Las
Vegas, two golf courses south of Primm, Nevada at the California
state line, and a 50% investment in The Signature at
MGM Grand, a condominium-hotel development in Las Vegas,
Nevada.
In October 2006, we entered into an agreement to sell Colorado
Belle and Edgewater. We expect this transaction to be completed
in the second quarter of 2007.
Our principal executive office is located at 3600 Las Vegas
Boulevard South, Las Vegas, Nevada 89109. Our telephone number
is
(702) 693-7120.
Recent
Developments
For the three months ended March 31, 2007, we earned net
revenue of $1.9 billion compared to $1.8 billion for
the three months ended March 31, 2006. First quarter
revenues were positively impacted by strong room pricing at our
Las Vegas Strip resorts, the reopening of Beau Rivage in August
2006, and the continued impact of new restaurants, nightclubs
and shows at several resorts. Operating income in the first
quarter of 2007 increased to $445 million from
$413 million in the prior year quarter, leading to an
increase in income from continuing operations to
$163 million from $140 million in the prior year first
quarter. Diluted earnings per share from continuing operations
increased to $0.55 for the first quarter of 2007 as compared to
$0.48 in the 2006 first quarter. Diluted net income per share
increased to $0.57 for the first quarter of 2007 compared to
$0.49 per share in the 2006 first quarter. Earnings
benefited from the strong revenue trends, solid operating
margins, and profits from sales of units of the Signature at MGM
Grand.
In the three months ended March 31, 2007, we repurchased
2.5 million shares of our common stock at a total cost of
$175 million, leaving 5.5 million shares available for
repurchase under a July 2004 authorization.
In March 2007, we ceased operations of Nevada Landing in Jean,
Nevada.
In April 2007, we announced an increase to the CityCenter
construction budget to $7.4 billion, excluding land costs
and preopening expenses. Preopening costs are estimated to be
$200 million in preopening expenses. After estimated
proceeds of $2.7 billion from the sale of residential
units, net construction cost is now estimated at approximately
$4.7 billion.
S-2
In April 2007, we entered into an agreement to purchase a
26-acre
parcel of land, located on the Las Vegas Strip north of our
Circus Circus Las Vegas property, for approximately
$444 million, which purchase is expected to close in the
second quarter of 2007, and separately agreed to purchase
several parcels of adjacent land, totaling approximately eight
acres, for approximately $131 million, which purchase was
consummated on May 3, 2007.
In April 2007, we entered into a loan agreement with The M
Resort LLC in connection with The M Resorts development of
an 80-acre
mixed use development located on the southeast corner of St.
Rose Parkway and Las Vegas Boulevard. We have committed, subject
to certain conditions, to finance $160 million of such
development in the form of a subordinated convertible note
issued pursuant to the loan agreement. The convertible note
matures eight years from its effective date and contains certain
optional and mandatory redemption provisions. We have the right
to convert such convertible note into a 50% equity interest in
The M Resort beginning eighteen months after the notes
issuance if not repaid.
In April 2007, we consummated the sale of our Buffalo
Bills, Primm Valley and Whiskey Petes casino resorts
located in Primm, Nevada. We received net proceeds of
approximately $398 million. Primm Valley Golf Club was not
included in the sale.
In March 2007, we ceased operations of Nevada Landing in Jean,
Nevada.
In October 2006, we entered into an agreement to sell our
subsidiaries that operate Colorado Belle Resort &
Casino and Edgewater Resort & Casino, located in
Laughlin, Nevada, including substantially all of the assets of
those resorts, subject to customary sales conditions and
regulatory approvals, for approximately $200 million,
subject to certain working capital adjustments. We expect this
transaction to be completed during the second quarter of 2007.
S-3
The
Offering
The following is a brief summary of some of the terms of the
offering. For a more complete description of the terms of the
notes, see Description of the Notes in this
prospectus supplement.
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Issuer |
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MGM MIRAGE |
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Notes offered |
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$ aggregate principal amount
of % senior notes due 2016. |
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Maturity |
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The notes mature
on ,
2016. |
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Interest payment dates |
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and
of each year after the date of issuance of the notes
commencing . |
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Guarantees |
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The notes will be unconditionally guaranteed, jointly and
severally, on a senior basis by substantially all of our wholly
owned U.S. subsidiaries except for U.S. holding
companies of our foreign subsidiaries. |
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Ranking |
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The notes and guarantees will be general unsecured senior
obligations of MGM MIRAGE and each guarantor, respectively, and
will rank equally with or senior to all existing or future
indebtedness of MGM MIRAGE and each guarantor,
respectively. See Description of the Notes
Ranking. |
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Optional redemption |
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We may redeem the notes in whole or in part at any time prior to
their maturity at the redemption price described in the section
Description of the Notes Optional
Redemption. |
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Covenants |
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The indenture contains covenants that, among other things, will
limit our ability and, in certain instances, the ability of our
subsidiaries to: |
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incur liens on assets to secure debt;
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enter into certain sale and lease-back
transactions; and
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merge or consolidate with another company or sell
substantially all assets.
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These covenants are subject to a number of important
qualifications and exceptions. See Description of the
Notes Additional Covenants of MGM MIRAGE.
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Use of proceeds |
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We estimate that the net proceeds from this offering will be
approximately $ million. We
intend to use the proceeds to repay a portion of the outstanding
amount under our $7.0 billion senior credit facility and
for general corporate purposes. |
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Risk factors |
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See Risk Factors and the other information in this
prospectus supplement for a discussion of the factors you should
carefully consider before deciding to invest in the notes. |
S-4
RISK
FACTORS
Before you invest in the notes, you should be aware that
investment in the notes carries various risks, including those
described below as well as those beginning on page 12 of
our Annual Report on
Form 10-K
for the year ended December 31, 2006. We urge you to
carefully consider these risk factors, together with all
of the other information included and incorporated by reference
in this prospectus supplement and accompanying prospectus,
before you decide to invest in the notes.
Our
substantial indebtedness could adversely affect our operations
and financial results and impair our ability to satisfy our
obligations under the notes.
We had approximately $13 billion of indebtedness as of
December 31, 2006. The interest rate on a large portion of
our long-term debt is subject to fluctuation based on changes in
short-term interest rates and the level of
debt-to-EBITDA
under the provisions of our senior credit facility.
The notes will not restrict our ability to borrow substantial
additional funds in the future that may be either pari passu
with or subordinated to the notes, and the notes provide
holders only limited protection should we be involved in a
highly leveraged transaction. If we incur additional
indebtedness, it could increase the related risks that we face.
Our indebtedness could have important consequences to you. For
example, it could:
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increase our vulnerability to general adverse economic and
industry conditions;
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limit our flexibility in planning for, or reacting to, changes
in our business and industry;
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limit our ability to borrow additional funds; and
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place us at a competitive disadvantage compared to other less
leveraged competitors.
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Servicing
our indebtedness will require a significant amount of cash and
our ability to generate sufficient cash depends on many factors,
some of which are beyond our control.
Our ability to make payments on and to refinance our
indebtedness and to fund planned capital expenditures depends on
our ability to generate cash flow in the future. This, to some
extent, is subject to general economic, financial, competitive,
legislative and regulatory factors and other factors that are
beyond our control. In addition, our ability to borrow funds
under our senior credit facility in the future will depend on
our meeting the financial covenants in the agreements, including
a minimum interest coverage test and a maximum leverage ratio
test. We cannot assure you that our business will generate cash
flow from operations or that future borrowings will be available
to us under our senior credit facility in an amount sufficient
to enable us to pay our indebtedness or to fund our other
liquidity needs. As a result, we may need to refinance all or a
portion of our indebtedness on or before maturity. We cannot
assure you that we will be able to extend or refinance any of
our indebtedness on favorable terms or at all. Our inability to
generate sufficient cash flow or refinance our indebtedness on
favorable terms could have a material adverse effect on our
financial condition.
Fraudulent
conveyance statutes allow courts, under specific circumstances,
to avoid subsidiary guarantees.
Various fraudulent conveyance and similar laws have been enacted
for the protection of creditors and may be utilized by courts to
avoid or limit the guarantees of the notes by our subsidiaries.
The requirements for establishing a fraudulent conveyance vary
depending on the law of the jurisdiction that is being applied.
Generally, if in a bankruptcy, reorganization or other judicial
proceeding a court were to find that the guarantor received less
than reasonably equivalent value or fair consideration for
incurring indebtedness evidenced by guarantees, and
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was insolvent at the time of the incurrence of such indebtedness,
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was rendered insolvent by reason of incurring such indebtedness,
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was at such time engaged or about to engage in a business or
transaction for which its assets constituted unreasonably small
capital, or
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intended to incur, or believed that it would incur, debts beyond
its ability to pay such debts as they matured,
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S-5
such court could, with respect to the guarantor, declare void in
whole or in part the obligations of such guarantor under the
guarantees. Any payment by such guarantor pursuant to its
guarantee could also be required to be returned to it, or to a
fund for the benefit of its creditors. Generally, an entity will
be considered insolvent if the sum of its respective debts is
greater than the fair saleable value of all of its property at a
fair valuation or if the present fair saleable value of its
assets is less than the amount that will be required to pay its
probable liability on its existing debts, as they become
absolute and mature.
We, meaning only MGM MIRAGE, have no operations of our own and
derive all of our revenue from our subsidiaries. If a guarantee
of the notes by a subsidiary were voided as a fraudulent
transfer, holders of other indebtedness of, and trade creditors
of, that subsidiary would generally be entitled to payment of
their claims from the assets of the subsidiary before such
assets could be made available for distribution to us to satisfy
our own obligations. The indenture for the notes will not limit
the incurrence of additional indebtedness by us and our
subsidiaries or limit investments by us in our subsidiaries.
We may
require you to dispose of your notes or redeem your notes if any
gaming authority finds you unsuitable to hold
them.
We may require you to dispose of your notes or redeem your notes
if any gaming authority finds you unsuitable to hold them or in
order to otherwise comply with any gaming laws to which we or
any of our subsidiaries are or may become subject, as more fully
described in the sections entitled Regulation and
Licensing and Description of the Notes
Mandatory Disposition Pursuant to Gaming Laws.
An
active trading market may not develop for these
notes.
Prior to this offering, there was no public market for the
notes. We have been informed by the underwriters that they
intend to make a market in the notes after we complete this
offering. However, the underwriters may cease their market
making activities at any time. In addition, the liquidity of the
trading market in these notes, and the market price quoted for
these notes, may be adversely affected by changes in the overall
market for these types of securities and by changes in our
financial performance or prospects or in the prospects for
companies in our industry generally. As a result, you cannot be
sure that an active trading market will develop for these notes.
USE OF
PROCEEDS
We plan to use the net proceeds from the offering of these notes
(approximately $ million
after commissions and offering expenses) to repay a portion of
the outstanding amount under our $7.0 billion credit
facility and for general corporate purposes. The
$7.0 billion credit facility matures on October 3,
2011 and bears interest (6.5% as of December 31,
2006) based upon the bank reference rate plus an applicable
margin ranging from 0.00% to 0.375% or reserve adjusted LIBOR
rate plus an applicable margin ranging from 0.375% to 1.375%. As
of December 31, 2006, there was approximately
$4.4 billion outstanding under the $7.0 billion credit
facility.
RATIO OF
EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed
charges for the periods indicated:
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For the Years Ended December 31,
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Ratio of Earnings to Fixed Charges
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2.21
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1.99
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2.21
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1.89
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1.96
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Earnings consist of income from continuing operations before
income taxes and fixed charges, adjusted to exclude capitalized
interest. Fixed charges consist of interest, whether expensed or
capitalized, amortization of debt discounts, premiums and
issuance costs.
S-6
REGULATION AND
LICENSING
The gaming industry is highly regulated, and we must maintain
our licenses and pay gaming taxes to continue our operations.
Each of our casinos is subject to extensive regulation under the
laws, rules and regulations of the jurisdiction where it is
located. These laws, rules and regulations generally concern the
responsibility, financial stability and character of the owners,
managers, and persons with financial interest in the gaming
operations. Violations of laws in one jurisdiction could result
in disciplinary action in other jurisdictions.
Our businesses are subject to various federal, state and local
laws and regulations in addition to gaming regulations. These
laws and regulations include, but are not limited to,
restrictions and conditions concerning alcoholic beverages,
environmental matters, employees, currency transactions,
taxation, zoning and building codes, and marketing and
advertising. Such laws and regulations could change or could be
interpreted differently in the future, or new laws and
regulations could be enacted. Material changes, new laws or
regulations, or material differences in interpretations by
courts or governmental authorities could adversely affect our
operating results.
Under the gaming laws of Nevada, Michigan, Mississippi, New
Jersey, Illinois, Macau S.A.R., and our certificate of
incorporation, holders of our securities may be required, under
certain circumstances, to dispose of the securities. If the
holder refuses to do so, we may be required to repurchase the
security.
Consequently, each holder of notes, by accepting any notes, will
be deemed to have agreed to be bound by the requirements imposed
by the gaming authorities in any jurisdictions we, or any of our
subsidiaries, conduct or propose to conduct gaming activities.
See Description of the Notes Mandatory
Disposition Pursuant to Gaming Laws. In addition, under
the indenture governing the notes, each holder and beneficial
owner of notes, by accepting or otherwise acquiring an interest
in any notes, will be deemed to have agreed to apply for a
license, qualification, or finding of suitability if and to the
extent required by the gaming authorities in any jurisdiction in
which we, or any of our subsidiaries, conduct or propose to
conduct gaming activities. In such an event, if a holder of
notes fails to apply or become licensed or qualified or is found
unsuitable, we shall have the right, at our option:
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to require the holder to dispose of its notes or beneficial
interest therein within 30 days of receiving notice of our
election or such earlier date as may be requested or prescribed
by a gaming authority; or
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to redeem the notes at a redemption price equal to the lesser of
(1) the holders cost, plus accrued and unpaid
interest, if any, to the earlier of the redemption date and the
date of the finding of unsuitability or failure to comply and
(2) 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the earlier of the redemption date
and the date of the finding of unsuitability or failure to
comply, which may be less than 30 days following the notice
of redemption if so requested or prescribed by the gaming
authority.
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We will not be responsible for any costs or expenses incurred by
any such holder or beneficial owner in connection with its
application for a license, qualification or finding of
suitability.
Under Nevada and Mississippi law, we may not make a public
offering of our securities without the prior approval of the
applicable gaming commission if we intend to use the offering
proceeds to construct, acquire or finance a gaming facility, or
retire or extend existing obligations incurred for such
purposes. On July 28, 2005, the Nevada Gaming Commission
granted us prior approval to make offerings for a period of two
years, subject to certain conditions (the Nevada shelf
approval). The Chairman of the Nevada Gaming Control Board
may rescind this approval for good cause without prior notice
upon the issuance of an interlocutory stop order. We received a
similar three-year approval from the Mississippi Gaming
Commission on May 18, 2006. This offering will be made
pursuant to such approvals. These prior approvals do not
constitute a finding, recommendation or approval by the Nevada
Gaming Commission, the Nevada Gaming Control Board or the
Mississippi Gaming Commission as to the accuracy or adequacy of
this prospectus supplement, or the investment merits of the
notes. Any representation to the contrary is unlawful.
The Nevada shelf approval includes prior approvals of the
subsidiary guarantees being made by the Nevada licensed or
registered subsidiary guarantors under the notes. Likewise, the
Nevada shelf approval includes prior approvals of restrictions
on the transfer of the equity securities of our Nevada licensed
or registered subsidiary guarantors and of the agreements not to
encumber such equity securities. A waiver of similar approvals
was obtained from the Mississippi Gaming Commission on
May 18, 2006, with respect to restrictions on the transfer
of,
S-7
and agreements not to encumber, the equity securities of the
corporate Subsidiaries of MGM MIRAGE licensed in Mississippi.
Under Illinois law we are required to obtain the Illinois Gaming
Boards approval prior to our Illinois subsidiary, Nevada
Landing Partnership, issuing a guarantee of any indebtedness.
Accordingly, we and Nevada Landing Partnership will petition the
Illinois Gaming Board to allow Nevada Landing Partnership to
issue a subsidiary guarantee of the notes. Based upon the
Illinois Gaming Boards prior decisions to allow Nevada
Landing Partnership to guarantee our credit and previously
issued senior debt, we and Nevada Landing Partnership believe
the Illinois Gaming Board will approve the petition and allow
Nevada Landing Partnership to guarantee the notes. However,
there can be no assurance that the Illinois Gaming Board will
grant the necessary approval.
The Nevada Gaming Commission, the Michigan Gaming Control Board,
the New Jersey Casino Control Commission, the Mississippi Gaming
Commission, the Illinois Gaming Board and the Macau gaming
authorities, may also, among other things, limit, condition,
suspend or revoke a gaming license or approval to own the stock
or joint venture interests of any of our operations in such
licensing authoritys jurisdiction, for any cause deemed
reasonable by such licensing authority. Substantial fines or
forfeiture of assets for violations of gaming laws or
regulations may be levied against us, such subsidiaries and
joint ventures and the persons involved. The suspension or
revocation of any of our gaming licenses or the levy on us of
substantial fines or forfeiture of assets could have a material
adverse effect on our business.
To date, we have obtained all gaming licenses necessary for the
operation of our gaming activities. Gaming licenses and related
approvals, however, are deemed to be privileges under the laws
of the jurisdictions in which we conduct gaming activities, and
no assurances can be given that any new gaming licenses that may
be required in the future will be granted or that existing
gaming licenses will not be revoked or suspended.
The foregoing is only a summary of the applicable regulatory
requirements. For a more detailed description of the applicable
regulatory requirements, including requirements under gaming
laws and our certificate of incorporation, see Description
of Regulation and Licensing filed as Exhibit 99 to
our Annual Report on
Form 10-K
for the year ended December 31, 2006.
DESCRIPTION
OF THE NOTES
You can find the definitions of certain terms used in this
description under the subheading Certain
Definitions. In this description, the words MGM
MIRAGE, we, us and our
refer only to the single corporation MGM MIRAGE, a Delaware
corporation, and not to any of its Subsidiaries.
MGM MIRAGE will issue
the % senior notes due 2016,
which we refer to as the notes. The notes will be
issued under an indenture dated December 21, 2006, which we
refer to as the base indenture, as supplemented by a
supplemental indenture to be dated as of the date of issuance of
the notes, which we refer to as the supplemental
indenture, among MGM MIRAGE, the Subsidiary Guarantors (as
defined below) and U.S. Bank National Association, as
trustee (the trustee). We refer to the base
indenture, as supplemented by the supplemental indenture, as the
indenture. The terms of the notes include those
provisions contained in the indenture and those made part of the
indenture by reference to the Trust Indenture Act of 1939.
The following description is a summary of the material
provisions of the indenture. This summary does not restate the
indenture in its entirety. We urge you to read the indenture
because the indenture, and not this description, defines your
rights as a holder of the notes. Copies of the indenture may be
obtained from MGM MIRAGE.
Ranking
The notes will be:
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senior obligations of MGM MIRAGE that will be equal in right of
payment to all other senior Indebtedness of MGM MIRAGE from time
to time outstanding;
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senior in right of payment to the $710 million
9.75% senior subordinated notes due 2007 of MGM MIRAGE and
the $400 million 8.375% senior subordinated notes due 2011
of MGM MIRAGE, together referred to herein as the
Subordinated Notes, and future Indebtedness that may
be subordinated to the notes;
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senior in right of payment to the guarantees by MGM MIRAGE of
the $492.2 million 10.25% senior subordinated notes
due 2007 of Mandalay Resort Group, the $297.6 million
9.375% senior subordinated notes due 2010 of Mandalay
Resort Group, and the $150 million 7.625% senior
subordinated debentures due 2013 of Mandalay Resort Group (such
notes together referred to herein as the Subordinated
Mandalay Notes);
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guaranteed on a senior basis by each of the Subsidiaries of MGM
MIRAGE other than Excluded Subsidiaries (see
Subsidiary Guarantees below) with the
guarantee of Mandalay Resort Group being senior in right of
payment to its obligations under the Subordinated Mandalay
Notes; and
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effectively subordinated to all Indebtedness of Excluded
Subsidiaries.
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As of December 31, 2006, the Excluded Subsidiaries of MGM
MIRAGE had outstanding Indebtedness of $109 million
(excluding Indebtedness owed to MGM MIRAGE or any Subsidiary
Guarantor).
The indenture does not contain any limitation on the amount of
Indebtedness of MGM MIRAGE or its Subsidiaries, but limits Liens
securing Indebtedness of MGM MIRAGE and the Subsidiary
Guarantors to 15% of Consolidated Net Tangible Assets (unless
the notes are secured equally and ratably with such other
Indebtedness and subject to other customary exceptions; see
Additional Covenants of MGM MIRAGE Limitation
on Liens below).
Except as described under Merger,
Consolidation or Sale of Assets or
Additional Covenants of MGM MIRAGE
below, the indenture does not contain any provisions that would
afford holders of the notes protection in the event of
(i) a highly leveraged or similar transaction involving MGM
MIRAGE or any of its Subsidiaries, or (ii) a
reorganization, restructuring, merger or similar transaction
involving MGM MIRAGE or any of its Subsidiaries that may
adversely affect the holders of the notes. In addition, subject
to the limitations set forth under Merger,
Consolidation or Sale of Assets and
Additional Covenants of MGM MIRAGE
below, MGM MIRAGE or any of its Subsidiaries may, in the future,
enter into certain transactions that would increase the amount
of Indebtedness of MGM MIRAGE or its Subsidiaries or
substantially reduce or eliminate the assets of MGM MIRAGE or
its Subsidiaries, which may have an adverse effect on MGM
MIRAGEs ability to service its Indebtedness, including the
notes.
Principal,
Maturity and Interest
The notes will initially be
$ million in aggregate
principal amount. On December 21, 2006, we issued
$750 million in aggregate principal amount of
7.625% senior notes due 2017 under the base indenture, and
we may issue an unlimited amount of additional notes under the
base indenture from time to time after this offering. We may
create and issue additional notes with the same terms as the
notes offered hereby so that the additional notes will form a
single class with the notes offered hereby. MGM MIRAGE will
issue the notes in denominations of $1,000 and integral
multiples of $1,000. The notes will mature
on ,
2016.
Interest on the notes will accrue at the rate
of % per annum and will be
payable semiannually in arrears each year until maturity,
beginning
on .
Interest on the notes will accrue from the issue date of such
notes or, if interest has already been paid, from the date it
was most recently paid with respect to such notes.
MGM MIRAGE will make each interest payment to the holders
of record of the notes on the immediately
preceding
and .
Interest will be computed on the basis of a
360-day year
comprised of twelve
30-day
months.
Subsidiary
Guarantees
MGM MIRAGEs payment obligations under the notes will be
jointly and severally guaranteed (the Subsidiary
Guarantees) by each of the Subsidiaries of MGM MIRAGE
other than the Excluded Subsidiaries (the Subsidiary
Guarantors). As of the issue date, the Subsidiary
Guarantors will include, among others, MGM Grand
S-9
Hotel, LLC (which owns the MGM Grand Las Vegas), Mirage Resorts,
Incorporated (which indirectly owns, among other properties,
Bellagio and The Mirage), New York-New York Hotel and Casino,
LLC (which owns New York-New York), Treasure Island Corp. (which
owns TI), MGM Grand Detroit, Inc. (which owns approximately 97%
of MGM Grand Detroit, LLC, which in turn owns the MGM Grand
Detroit casino), Beau Rivage Resorts, Inc. (which owns the Beau
Rivage resort in Biloxi, Mississippi), MAC, CORP. (which owns
50% of Marina District Development Holding Co., LLC, which in
turn owns 100% of Marina District Development Company, LLC, the
operator of Borgata), and Mandalay Resort Group (which
indirectly owns, among other properties, Mandalay Bay, Luxor and
Excalibur). The Excluded Subsidiaries will include all
non-U.S. Subsidiaries
of MGM MIRAGE and such
non-U.S. Subsidiaries
U.S. holding companies. The Excluded Subsidiaries also
include MGM Grand Detroit, LLC and its Subsidiaries (including
MGM Grand Detroit II, LLC), MGMM Insurance Company, Circus
Circus New Jersey, Inc., Go Vegas, MGM MIRAGE Hospitality, LLC,
MGM MIRAGE Online, LLC, Pine Hills Development II, Revive
Partners, LLC, M3 Nevada Insurance Company, and, until such time
as we receive the Illinois Gaming Approval, Nevada Landing
Partnership (which owns 50% of Grand Victoria), and other
subsidiaries that may from time to time become Excluded
Subsidiaries under the indenture (if, among other conditions,
such other subsidiaries are not guarantors of our other
Indebtedness and are not subject to any covenants in, or liens
securing, the Credit Facility or the Existing Senior Notes). MGM
Grand Detroit, LLC is a borrower under the Credit Facility but
its obligations under the Credit Facility are limited to the
amount of the proceeds of borrowings under the Credit Facility
made available to MGM Grand Detroit, LLC. The Subsidiary
Guarantee of each Subsidiary Guarantor will be (i) senior
in right of payment to the guarantees of the Subordinated Notes
by the Subsidiary Guarantor, the Subordinated Mandalay Notes (in
the case of Mandalay Resort Group) and the guarantees of the
Subordinated Mandalay Notes (in the case of any other Subsidiary
Guarantor) and future Indebtedness of the Subsidiary Guarantor
that may be subordinated to the notes and (ii) equal or
senior in right of payment with all other existing and future
Indebtedness of the Subsidiary Guarantor. The obligations of
each Subsidiary Guarantor under its Subsidiary Guarantee will be
limited so as not to constitute a fraudulent conveyance under
applicable law.
In addition to the Subsidiary Guarantors named in the indenture,
the indenture will provide that, except for Excluded
Subsidiaries, any existing or future Subsidiary of MGM MIRAGE
shall become a Subsidiary Guarantor if such Subsidiary incurs
any Indebtedness or if and for so long as such Subsidiary
provides a guarantee in respect of Indebtedness of MGM MIRAGE.
Until such time as we have petitioned for and obtained approval
from the Illinois Gaming Board, which approval may not be
obtained at all, our Illinois Subsidiary, Nevada Landing
Partnership, is prohibited from issuing a guarantee of the
notes. See Regulation and Licensing.
No Subsidiary Guarantor will be permitted to consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is
the surviving Person) another corporation or other Person,
whether or not affiliated with such Subsidiary Guarantor unless:
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subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if
other than such Subsidiary Guarantor) assumes all the
obligations of such Subsidiary Guarantor under the Subsidiary
Guarantees and the indenture pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the
trustee; and
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immediately after giving effect to such transaction, no Default
or Event of Default exists.
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The indenture will provide that in the event of (a) a sale
or other disposition of all of the assets of any Subsidiary
Guarantor, by way of merger, consolidation or otherwise or
(b) a sale or other disposition of all of the capital stock
of any Subsidiary Guarantor, then the Subsidiary Guarantor (in
the event of a sale or other disposition, by way of such a
merger, consolidation or otherwise, of all of the capital stock
of such Subsidiary Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all of
the assets of the Subsidiary Guarantor) will be released and
relieved of any obligations under its or the selling
companys Subsidiary Guarantees, except in the event of a
sale or other disposition to MGM MIRAGE, any other Subsidiary
Guarantor or any Affiliate thereof.
S-10
Optional
Redemption
The notes are redeemable at our election, in whole or in part at
any time at a redemption price equal to the greater of:
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100% of the principal amount of the notes then
outstanding; or
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as determined by an Independent Investment Banker, the sum of
the present values of the remaining scheduled payments of
principal and interest on the notes to be redeemed (not
including any portion of such payments of interest accrued to
the date of redemption) discounted to the redemption date on a
semiannual basis (assuming a
360-day year
consisting of twelve
30-day
months) at the Adjusted Treasury Rate, plus 50 basis points,
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plus, in either of the above cases, accrued and unpaid interest
to the date of redemption on the notes to be redeemed.
Adjusted Treasury Rate means, with respect to
any redemption date:
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the yield, under the heading which represents the average for
the immediately preceding week, appearing in the most recently
published statistical release designated H.15(519)
or any successor publication which is published weekly by the
Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption
Treasury Constant Maturities, for the maturity
corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the Remaining Life (as
defined below), yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated
or extrapolated from such yields on a straight line basis,
rounding to the nearest month); or
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if such release (or any successor release) is not published
during the week preceding the calculation date or does not
contain such yields, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
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The Adjusted Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
Comparable Treasury Issue means the United
States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of
the notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such securities
(Remaining Life).
Comparable Treasury Price means (1) the
average of four Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest
Reference Treasury Dealer Quotations, or (2) if the
Independent Investment Banker obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such
quotations.
Independent Investment Banker means one of
the Reference Treasury Dealers appointed by us.
Reference Treasury Dealer means any primary
U.S. Government securities dealer in New York City selected
by us.
Reference Treasury Dealer Quotations means,
with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Independent
Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker at 5:00 p.m., New York City
time, on the third Business Day preceding such redemption date.
We will mail a notice of redemption at least 30 days but
not more than 60 days before the redemption date to each
holder of notes to be redeemed. If we elect to partially redeem
the notes, the trustee will select in a fair and appropriate
manner the notes to be redeemed.
S-11
Unless we default in payment of the redemption price, on and
after the redemption date, interest will cease to accrue on the
notes or portion thereof called for redemption.
Mandatory
Redemption
MGM MIRAGE will not be required to make any mandatory redemption
or sinking fund payments in respect of the notes.
Mandatory
Disposition Pursuant to Gaming Laws
Each holder, by accepting a note, shall be deemed to have agreed
that if the gaming authority of any jurisdiction in which MGM
MIRAGE or any of its Subsidiaries conducts or proposes to
conduct gaming requires that a person who is a holder or the
beneficial owner of notes be licensed, qualified or found
suitable under applicable gaming laws, such holder or beneficial
owner, as the case may be, shall apply for a license,
qualification or a finding of suitability within the required
time period. If such Person fails to apply or become licensed or
qualified or is found unsuitable, MGM MIRAGE shall have the
right, at its option:
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to require such Person to dispose of its notes or beneficial
interest therein within 30 days of receipt of notice of MGM
MIRAGEs election or such earlier date as may be requested
or prescribed by such gaming authority; or
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to redeem such notes, which redemption may be less than
30 days following the notice of redemption if so requested
or prescribed by the applicable gaming authority, at a
redemption price equal to:
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(1) the lesser of:
(a) the Persons cost, plus accrued and unpaid
interest, if any, to the earlier of the redemption date or the
date of the finding of unsuitability or failure to
comply; and
(b) 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the earlier of the redemption date
or the date of the finding of unsuitability or failure to
comply; or
(2) such other amount as may be required by applicable law
or order of the applicable gaming authority.
MGM MIRAGE shall notify the trustee in writing of any such
disqualified holder status or redemption as soon as practicable.
MGM MIRAGE shall not be responsible for any costs or expenses
any holder of MGM MIRAGE notes may incur in connection with its
application for a license, qualification or a finding of
suitability.
Additional
Covenants of MGM MIRAGE
Limitation
on Liens
Other than as provided below under Exempted
Liens and Sale and Lease-Back Transactions, neither MGM
MIRAGE nor any of the Subsidiary Guarantors may issue, assume or
guarantee any Indebtedness secured by a Lien upon any Principal
Property or on any evidences of Indebtedness or shares of
capital stock of, or other ownership interests in, any
Subsidiaries (regardless of whether the Principal Property,
Indebtedness, capital stock or ownership interests were acquired
before or after the date of the indenture) without effectively
providing that the notes shall be secured equally and ratably
with (or prior to) such Indebtedness so long as such
Indebtedness shall be so secured, except that this restriction
will not apply to:
(a) Liens existing on the date of original issuance of the
notes;
(b) Liens affecting property of a corporation or other
entity existing at the time it becomes a Subsidiary Guarantor or
at the time it is merged into or consolidated with MGM MIRAGE or
a Subsidiary Guarantor (provided that such Liens are not
incurred in connection with, or in contemplation of, such entity
becoming a Subsidiary Guarantor or such merger or consolidation
and do not extend to or cover property of MGM MIRAGE or any
Subsidiary Guarantor other than property of the entity so
acquired or which becomes a Subsidiary Guarantor);
S-12
(c) Liens (including purchase money Liens) existing at the
time of acquisition thereof on property acquired after the date
hereof or to secure Indebtedness Incurred prior to, at the time
of, or within 24 months after the acquisition for the
purpose of financing all or part of the purchase price of
property acquired after the date hereof (provided that such
Liens do not extend to or cover any property of MGM MIRAGE or
any Subsidiary Guarantor other than the property so acquired);
(d) Liens on any property to secure all or part of the cost
of improvements or construction thereon or Indebtedness Incurred
to provide funds for such purpose in a principal amount not
exceeding the cost of such improvements or construction;
(e) Liens which secure Indebtedness of a Subsidiary of MGM
MIRAGE to MGM MIRAGE or to a Subsidiary Guarantor or which
secure Indebtedness of MGM MIRAGE to a Subsidiary Guarantor;
(f) Liens on the stock, partnership or other equity
interest of MGM MIRAGE or Subsidiary Guarantor in any Joint
Venture or any Subsidiary that owns an equity interest in such
Joint Venture to secure Indebtedness, provided the amount of
such Indebtedness is contributed
and/or
advanced solely to such Joint Venture;
(g) Liens to government entities, including pollution
control or industrial revenue bond financing;
(h) Liens required by any contract or statute in order to
permit MGM MIRAGE or a Subsidiary of MGM MIRAGE to perform
any contract or subcontract made by it with or at the request of
a governmental entity;
(i) mechanics, materialmans, carriers or
other like Liens, arising in the ordinary course of business;
(j) Liens for taxes or assessments and similar charges;
(k) zoning restrictions, easements, licenses, covenants,
reservations, restrictions on the use of real property and
certain other minor irregularities of title; and
(l) any extension, renewal, replacement or refinancing of
any Indebtedness secured by a Lien permitted by any of the
foregoing clauses (a) through (f).
Notwithstanding the foregoing,
(a) if any of the Existing Senior Notes are hereafter
secured by any Liens on any of the assets of MGM MIRAGE or
any Subsidiary Guarantor, then MGM MIRAGE and each Subsidiary
Guarantor shall, substantially concurrently with the granting of
any such Liens, subject to all necessary gaming regulatory
approvals, grant perfected Liens in the same collateral to
secure the notes, equally, ratably and on a pari passu basis.
The Liens granted pursuant to this provision shall be
(i) granted concurrently with the granting of any such
Liens, and (ii) granted pursuant to instruments, documents
and agreements which are no less favorable to the trustee and
the holders of the notes than those granted to secure the
Existing Senior Notes. In connection with the granting of any
such Liens, MGM MIRAGE and each Subsidiary Guarantor shall
provide to the trustee (y) policies of title insurance on
customary terms and conditions, to the extent that policies of
title insurance on the corresponding property are provided to
the holders of the Existing Senior Notes or their trustee (and
in an insured amount that bears the same proportion to the
principal amount of the outstanding notes as the insured amount
in the policies provided to the holders of the Existing Senior
Notes bears to the aggregate outstanding amount thereof), and
(z) legal opinions and other assurances as the trustee may
reasonably request; and
(b) if MGM MIRAGE and the Subsidiary Guarantors become
entitled to the release of any of such equal, ratable and pari
passu Liens securing the Existing Senior Notes and guarantees
related thereto (and any other notes or guarantees issued after
the date of issuance of the notes), and provided that no default
or event of default has then occurred and remains continuing,
MGM MIRAGE and the Subsidiary Guarantors may in their sole
discretion request that the collateral agent release any such
Liens securing the notes and the Existing Senior Notes, and in
such circumstances the collateral agent shall so release such
Liens.
S-13
Limitation
on Sale and Lease-Back Transactions
Other than as provided below under Exempted
Liens and Sale and Lease-Back Transactions, neither MGM
MIRAGE nor any Subsidiary Guarantor will enter into any Sale and
Lease-Back Transaction unless either:
(i) MGM MIRAGE or such Subsidiary Guarantor would be
entitled, pursuant to the provisions described in
clauses (a) through (l) under
Limitation on Liens above, to create,
assume or suffer to exist a Lien on the property to be leased
without equally and ratably securing the notes; or
(ii) an amount equal to the greater of the net cash
proceeds of such sale or the fair market value of such property
(in the good faith opinion of MGM MIRAGEs board of
directors) is applied within 120 days to the retirement or
other discharge of its Funded Debt.
Exempted
Liens and Sale and Lease-Back Transactions
Notwithstanding the restrictions set forth in
Limitation on Liens and
Limitation on Sale and Lease-Back
Transactions above, MGM MIRAGE or any Subsidiary Guarantor
may create, assume or suffer to exist Liens or enter into Sale
and Lease-Back Transactions not otherwise permitted as described
above, provided that at the time of such event, and after giving
effect thereto, the sum of outstanding Indebtedness secured by
such Liens (not including Liens permitted under
Limitation on Liens above) plus all
Attributable Debt in respect of such Sale and Lease-Back
Transactions entered into (not including Sale and Lease-Back
Transactions permitted under Limitation on
Sale and Lease-Back Transactions above), measured, in each
case, at the time any such Lien is incurred or any such Sale and
Lease-Back Transaction is entered into by MGM MIRAGE and the
Subsidiary Guarantors, does not exceed 15% of Consolidated Net
Tangible Assets, provided that the foregoing shall not apply to
any Liens that may at any time secure any of the Existing Senior
Notes.
Merger,
Consolidation or Sale of Assets
The indenture does not allow us to consolidate or merge with or
into, or sell, assign, convey, transfer or lease our properties
and assets, substantially in their entirety, as computed on a
consolidated basis, to another corporation, person or entity
unless:
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either we are the surviving person, in the case of a merger or
consolidation, or the successor or transferee is a corporation
organized under the laws of the United States, or any state
thereof or the District of Columbia and the successor or
transferee corporation expressly assumes, by supplemental
indenture, all of our obligations under the indenture, including
under the notes; and
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no default or event of default exists immediately after such
transaction.
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Subsidiary
Guarantees
In addition to the Subsidiary Guarantors named in the indenture
on the closing date, the indenture will provide that any
existing or future Subsidiary of MGM MIRAGE (other than an
Excluded Subsidiary) shall become a Subsidiary Guarantor, on a
senior basis, of MGM MIRAGEs payment Obligations under the
notes and the indenture, if such Subsidiary incurs any
Indebtedness or if and for so long as such Subsidiary provides a
guarantee in respect of any Indebtedness of MGM MIRAGE.
Events of
Default
Events of default in respect of the notes means any of the
following:
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default in the payment of any interest upon any notes when it
becomes due and payable, and continuance of such default for a
period of 30 days;
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default in the payment of principal of or premium, if any, on
any notes when due;
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the acceleration of the maturity of any Indebtedness of MGM
MIRAGE or any Subsidiary Guarantor (other than Non-recourse
Indebtedness), at any one time, in an amount in excess of the
greater of (a) $25 million and (b) 5% of
Consolidated Net Tangible Assets, if such acceleration is not
annulled within 30 days after written notice as provided in
the indenture;
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S-14
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entry of final judgments against MGM MIRAGE or any Subsidiary
Guarantor which remain undischarged for a period of
60 days, provided that the aggregate of all such judgments
exceeds $25 million and judgments exceeding
$25 million remain undischarged for 60 days after
notice as provided in the indenture;
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default in the performance, or breach, of any covenants or
warranties in the indenture in respect of the notes if the
default continues uncured for a period of 60 days after
written notice to us by the trustee or to us and the trustee by
the holders of at least 25% in principal amount of the
outstanding notes as provided in the indenture; or
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certain events of bankruptcy, insolvency or reorganization.
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If an event of default occurs and continues, then the trustee or
the holders of not less than 25% in principal amount of the
outstanding notes may, by a notice in writing to us, and to the
trustee if given by such holders, declare to be due and payable
immediately the principal of the outstanding notes.
At any time after a declaration of acceleration with respect to
the notes has been made, but before a judgment or decree for
payment of the money due has been obtained by the trustee, the
holders of a majority in principal amount of the outstanding
notes may, subject to our having paid or deposited with the
trustee a sum sufficient to pay overdue interest and principal
which has become due other than by acceleration and certain
other conditions, rescind and annul such acceleration if all
events of default, other than the non-payment of accelerated
principal and premium, if any, with respect to the notes have
been cured or waived as provided in the indenture. For
information as to waiver of defaults see the discussion set
forth below under Modification and Waiver.
The indenture provides that the trustee is not obligated to
exercise any of its rights or powers under the indenture at the
request of any holder of notes, unless the trustee receives
indemnity satisfactory to it against any loss, liability or
expense. Subject to certain rights of the trustee and applicable
law, the holders of a majority in principal amount of the
outstanding notes shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power
conferred on the trustee with respect to such notes.
No holder of any notes will have any right to institute any
proceeding, judicial or otherwise, with respect to the indenture
or for the appointment of a receiver or trustee, or for any
remedy under the indenture, unless such holder shall have
previously given to the trustee written notice of a continuing
event of default with respect to the notes and the holders of at
least 25% in principal amount of the outstanding notes shall
have made written request and offered reasonable indemnity to
the trustee to institute such proceeding as trustee, and the
trustee shall not have received from the holders of a majority
in principal amount of the outstanding notes direction
inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, the
holder of any notes will have an absolute and unconditional
right to receive payment of the principal of, premium, if any,
and any interest on such notes on or after the due dates
expressed in such notes and to institute suit for the
enforcement of any such payment.
We are required by the indenture, within 120 days after the
end of each fiscal year, to furnish to the trustee a statement
as to compliance with the indenture. The indenture provides that
the trustee may withhold notice to the holders of notes of any
default or event of default (except a default in payment on
notes) with respect to the notes if and so long as a committee
of its trust officers, in good faith, determines that
withholding such notice is in the interest of the holders of the
notes. In addition, in the case of any default set forth in the
fifth bullet point of the first paragraph of this section, the
trustee will withhold notice to holders of such default until at
least 30 days after the occurrence thereof.
Modification
and Waiver
We and the trustee, at any time and from time to time, may
modify the indenture in respect of the notes without prior
notice to or consent of any holder of the notes for any of the
following purposes:
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to permit a successor corporation to assume our covenants and
obligations under the indenture and in the notes in accordance
with the terms of the indenture;
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to add to our covenants for the benefit of the holders of the
notes;
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to surrender any of our rights or powers conferred in the
indenture;
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to add any additional events of default;
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to supplement any of the provisions of the indenture to the
extent needed to permit or facilitate the defeasance and
discharge of the notes in a manner that will not adversely
affect the interests of the holders of such notes in any
material respect;
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to provide for the acceptance of appointment by a successor
trustee with respect to the notes and to add to or change any of
the provisions of the indenture as is necessary to provide for
the administration of the trust by more than one trustee;
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to comply with the requirements of the SEC in connection with
qualification of the indenture under the Trust Indenture Act;
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to cure any ambiguity;
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to correct or supplement any provision in the indenture which
may be defective or inconsistent with any other provision in the
indenture;
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to eliminate any conflict between the terms of the indenture and
the notes and the Trust Indenture Act; or
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to make any other provisions with respect to matters or
questions arising under the indenture which will not be
inconsistent with any provision of the indenture as long as the
new provisions do not adversely affect in any material respect
the interests of the holders of the notes.
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We may also modify the indenture in respect of the notes for any
other purpose if we receive the written consent of the holders
of not less than a majority in principal amount of the
outstanding notes. However, we may not, without the consent of
the holder of each note affected thereby:
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change the stated maturity or reduce the principal amount or the
rate of interest, or extend the time for payment of interest of
the notes or any premium payable upon the redemption of the
notes, or impair the right to institute suit for the enforcement
of any payment on or after the due date thereof (including, in
the case of redemption, on or after the redemption date), or
alter any redemption provisions in a manner adverse to the
holders of the notes or release any Subsidiary Guarantor under
any Subsidiary Guarantee (except in accordance with the terms of
the Indenture or the Subsidiary Guarantee) or collateral, if
any, securing the notes (except in accordance with the terms of
the Indenture or the documents governing such collateral, if
any);
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reduce the percentage in principal amount of the notes where the
consent of the holder is required for any such amendment,
supplemental indenture or waiver which is provided for in the
indenture; or
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modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions
of the indenture cannot be modified or waived without the
consent of the holder of each outstanding note which would be
affected.
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The indenture provides that the holders of not less than a
majority in aggregate principal amount of the notes, by notice
to the trustee, may on behalf of the holders of the notes waive
any default and its consequences under the indenture in respect
of the notes, except (1) a continuing default in the
payment of interest on, premium, if any, or the principal of,
any note held by a nonconsenting holder or (2) a default in
respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the holder of each
note.
Defeasance
of Notes or Certain Covenants in Certain Circumstances
Defeasance and Discharge. The indenture
provides that we may be discharged from any and all obligations
under the notes other than:
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certain obligations to pay additional amounts, if any, upon the
occurrence of certain tax, assessment or governmental charge
events regarding payments on the notes;
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to register the transfer or exchange of the notes;
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to replace stolen, lost or mutilated notes; or
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to maintain paying agencies and to hold money for payment in
trust.
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We may only defease and discharge all of our obligations under
the notes if:
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we irrevocably deposit with the trustee, in trust, the amount,
as certified by an officers certificate, of money
and/or
U.S. government obligations that, through the payment of
interest and principal in respect thereof in accordance with
their terms, will be sufficient to pay and discharge each
installment of principal and premium, if any and any interest
on, and any mandatory sinking fund payments in respect of, the
notes on the dates such payments are due; and
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we deliver to the trustee an opinion of counsel or a ruling from
the United States Internal Revenue Service, in either case to
the effect that holders of the notes will not recognize income,
gain or loss for United States federal income tax purposes as a
result of such deposit, defeasance and discharge.
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Defeasance of Certain Covenants. Upon
compliance with certain conditions, we may omit to comply with
certain restrictive covenants contained in the indenture in
respect of the notes, and in any such event any omission to
comply with our obligations or covenants shall not constitute a
default or event of default with respect to the notes. In that
event, you would lose the protection of these covenants, but
would gain the protection of having money
and/or
U.S. government obligations set aside in trust to repay the
notes. We may only defease any covenants if, among other
requirements:
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we deposit with the trustee money
and/or
U.S. government obligations that, through the payment of
interest and principal in respect to such obligations, in
accordance with their terms, will provide money in an amount, as
certified by an officers certificate, sufficient to pay
principal, premium, if any, and any interest on and any
mandatory sinking fund payments in respect of the notes on the
dates such payments are due; and
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we deliver to the trustee an opinion of counsel or a ruling from
the United States Internal Revenue Service to the effect that
the holders of the notes will not recognize income, gain or
loss, for United States federal income tax purposes, as a result
of the covenant defeasance.
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Limited
Liability of Certain Persons
The indenture provides that none of our past, present or future
stockholders, incorporators, employees, officers or directors,
or of any successor corporation or any of our affiliates shall
have any personal liability in respect of our obligations under
the indenture or the notes by reason of his, her or its status
as such stockholder, incorporator, employee, officer or director.
Gaming
Approvals
Restrictions on the transfer of the equity securities of the
Nevada licensed or registered Subsidiary Guarantors, and
agreements not to encumber such equity securities, require the
prior approval of the Nevada Gaming Commission or the Chairman
of the Nevada Gaming Control Board. The Nevada shelf approval
described in Regulation and Licensing includes prior
approvals of the subsidiary guarantees being made by the Nevada
licensed or registered Subsidiary Guarantors under the notes.
Likewise, the Nevada shelf approval includes prior approvals of
restrictions on the transfer of the equity securities of our
Nevada licensed or registered Subsidiary Guarantors and of the
agreements not to encumber such equity securities. A waiver of
similar approvals was obtained from the Mississippi Gaming
Commission on May 18, 2006, with respect to the
restrictions and agreements not to encumber the equity
securities of the corporate Subsidiaries of MGM MIRAGE licensed
in Mississippi. The Illinois Gaming Boards approval is
required prior to our Illinois subsidiary, Nevada Landing
Partnership, issuing a guarantee of the notes. We will petition
the Illinois Gaming Board to approve Nevada Landing
Partnerships execution of a Subsidiary Guarantee in
respect of the notes. See Regulation and Licensing.
Compliance
with Gaming Laws
Each holder of a note, by accepting any note, agrees to be bound
by the requirements imposed on holders of debt securities of MGM
MIRAGE by the gaming authority of any jurisdiction in which MGM
MIRAGE or any of its Subsidiaries conducts or proposes to
conduct gaming activities. For a description of the regulatory
requirements applicable to MGM MIRAGE, see Regulation and
Licensing herein.
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Reports
Whether or not required by the SEC, so long as any notes are
outstanding, MGM MIRAGE will furnish to the trustee, within
15 days after the time periods specified in the SECs
rules and regulations: (1) all quarterly and annual
financial information that would be required to be contained in
a filing with the SEC on
Forms 10-Q
and 10-K,
including a Managements Discussion and Analysis of
Financial Condition and Results of Operations and, with
respect to the annual information only, a report on the annual
financial statements by MGM MIRAGEs certified independent
accountants; and (2) all current reports that would be
required to be filed with the SEC on
Form 8-K.
In addition, whether or not required by the SEC, MGM MIRAGE will
file a copy of all of the information and reports referred to in
clauses (1) and (2) above with the SEC for public
availability within the time periods specified in the SECs
rules and regulations (unless the Commission will not accept
such a filing).
Concerning
the Trustee
If the trustee becomes a creditor of MGM MIRAGE, the indenture
limits its right to obtain payment of claims in certain cases,
or to realize on certain property received in respect of any
such claim as security or otherwise. The trustee will be
permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to
continue or resign.
The holders of a majority in aggregate principal amount of the
then outstanding notes will have the right to direct the time,
method and place of conducting any proceeding for exercising any
remedy available to the trustee in respect of the notes, subject
to certain exceptions. The indenture provides that in case an
Event of Default shall occur and be continuing, the trustee will
be required, in the exercise of its power, to use the degree of
care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the
request of any holder of such notes, unless such holder shall
have offered to the trustee security and indemnity satisfactory
to it against any loss, liability or expense.
Book-Entry;
Delivery and Form
The notes sold will initially be represented by one or more
permanent global notes in fully registered form without interest
coupons (each a global note) which will be deposited
with the trustee as a custodian for The Depositary Trust Company
(DTC) and registered in the name of a nominee of
such depositary.
Except as permitted by the indenture, the global notes may be
transferred, in whole and not in part, only to DTC or another
nominee of DTC. Investors may hold their beneficial interests in
the global notes directly through DTC if they are participating
organizations or participants in such system or
indirectly through organizations that are participants in such
system.
Depository
Procedures
DTC has advised MGM MIRAGE that DTC is a limited-purpose trust
company that was created to hold securities for its participants
and to facilitate the clearance and settlement of transactions
in such securities between participants through electronic
book-entry changes in accounts of its participants. The
participants include securities brokers and dealers, banks and
trust companies, clearing corporations and certain other
organizations. Access to DTCs system is also available to
other entities such as banks, brokers, dealers and trust
companies, which we refer to as indirect
participants, that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
Persons who are not participants may beneficially own securities
held by or on behalf of DTC only through the participants or the
indirect participants.
MGM MIRAGE expects that pursuant to procedures established by
DTC:
(i) upon deposit of the global notes, DTC will credit the
accounts of participants designated by the underwriters with
portions of the principal amount of the global notes; and
(ii) ownership of the notes evidenced by the global notes
will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect
to the interests of the participants), the participants and the
indirect participants.
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Prospective purchasers are advised that the laws of some states
require that certain persons take physical delivery in
definitive form of securities that they own. Consequently, the
ability to transfer notes evidenced by the global notes will be
limited to such extent.
So long as the global notes holder is the registered owner of
any notes, the global notes holder will be considered the sole
holder under the indenture of any notes evidenced by the global
notes. Beneficial owners of notes evidenced by the global notes
will not be considered the owners or holders thereof under the
indenture for any purpose, including with respect to the giving
of any directions, instructions or approvals to the trustee
thereunder. Neither MGM MIRAGE nor the trustee will have any
responsibility or liability for any aspect of the records of DTC
or for maintaining, supervising or reviewing any records of DTC
relating to the notes.
Payments in respect of the principal of, premium, if any, and
interest on any notes registered in the name of the global notes
holder on the applicable record date will be payable by the
trustee to or at the direction of the global notes holder in its
capacity as the registered holder under the indenture. Under the
terms of the indenture, MGM MIRAGE and the trustee may
treat the persons in whose names notes, including the global
notes, are registered as the owners thereof for the purpose of
receiving such payments. Consequently, neither MGM MIRAGE nor
the trustee has or will have any responsibility or liability for
the payment of such amounts to beneficial owners of notes. MGM
MIRAGE believes, however, that it is currently the policy of DTC
to immediately credit the accounts of the relevant participants
with such payments, in amounts proportionate to their respective
holdings of beneficial interests in the relevant security as
shown on the records of DTC. Payments by the participants and
the indirect participants to the beneficial owners of notes will
be governed by standing instructions and customary practice and
will be the responsibility of the participants or the indirect
participants.
Investors may elect to hold their interests in the global notes
outside the United States through the accounts maintained by
Clearstream Banking, S.A. (Clearstream) or the
Euroclear System (Euroclear) in DTC if they are
participants in those systems, or indirectly through
organizations which are participants in those systems.
Clearstream and Euroclear will hold interests on behalf of their
participants through customers securities accounts in
Clearstreams and Euroclears names on the books of
their respective depositaries which in turn will hold such
positions in customers accounts in the names of the
nominees of the depositaries on the books of DTC. All securities
in Clearstream or Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities
clearance accounts. Cross-market transfers between persons
holding directly or indirectly through DTC participants on the
one hand and Clearstream customers or Euroclear participants, on
the other, will be effected in DTC in accordance with DTCs
rules on behalf of the relevant European international clearing
system by the U.S. depositary for the system; however,
those cross-market transactions will require delivery by the
counterparty in the relevant European international clearing
system of instructions to that system in accordance with its
rules and procedures and within its established deadlines
(European time). The relevant European international clearing
system will, if the transaction meets its settlement
requirements, deliver instructions to the U.S. depositary
for that system to take action to effect final settlement on its
behalf by delivering or receiving interests in the global notes
in DTC, and making or receiving payment in accordance with
normal procedures for
same-day
funds settlement applicable to DTC. Clearstream customers and
Euroclear participants may not deliver instructions directly to
DTC. Because of the time-zone differences, credits of interests
in the global notes received in Clearstream or Euroclear as a
result of a transaction with a DTC participant will be made
during subsequent securities settlement processing and will be
credited the business day following the DTC settlement date.
Those credits or any transactions in the global notes settled
during that processing will be reported to the relevant
Clearstream customers or Euroclear participants on that business
day. Cash received in Clearstream or Euroclear as a result of
sales of interests in global notes by or through a Clearstream
customer or a Euroclear participant to a DTC participant will be
received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account
only as of the business day following the settlement in DTC.
The information in this section concerning DTC and its
book-entry system and concerning Clearstream and Euroclear and
the European clearing system has been obtained from sources that
we believe to be reliable, but we do not take responsibility for
its accuracy.
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Certificated
Securities
Subject to certain conditions, any person having a beneficial
interest in a global note may, upon request to the trustee,
exchange such beneficial interest for notes in the form of
certificated securities. Upon any such issuance, the trustee is
required to register such certificated securities in the name
of, and cause the same to be delivered to, such person or
persons (or the nominee of any thereof). In addition, if:
(i) MGM MIRAGE notifies the trustee in writing that DTC is
no longer willing or able to act as a depositary and MGM MIRAGE
is unable to locate a qualified successor within 90 days; or
(ii) MGM MIRAGE, at its option, notifies the trustee in
writing that it elects to cause the issuance of notes in the
form of certificated securities under the indenture, then, upon
surrender by the global notes holder of its global notes, notes
in such form will be issued to each person that the global notes
holder and DTC identify as being the beneficial owner of the
related notes.
Neither MGM MIRAGE nor the trustee will be liable for any delay
by the global notes holder or DTC in identifying the beneficial
owners of notes and MGM MIRAGE and the trustee may conclusively
rely on, and will be protected in relying on, instructions from
the global notes holder or DTC for all purposes.
Paying
Agent and Registrar for the Notes
The trustee will initially act as paying agent and registrar for
the notes. MGM MIRAGE may change the paying agent or registrar
without prior notice to the holders of the notes, and MGM MIRAGE
or any of its Subsidiaries may act as paying agent or registrar.
Transfer
and Exchange
A holder may transfer or exchange notes in accordance with the
indenture. The registrar and the trustee may require a holder,
among other things, to furnish appropriate endorsements and
transfer documents and MGM MIRAGE may require a holder to
pay any taxes and fees required by law or permitted by the
indenture. MGM MIRAGE is not required to transfer or exchange
any note selected for redemption. Also, MGM MIRAGE is not
required to transfer or exchange any note for a period of
15 days before a selection of notes to be redeemed.
The registered holder of a note will be treated as the owner of
it for all purposes.
Certain
Definitions
Set forth below are certain defined terms used in the indenture.
Reference is made to the indenture for a full disclosure of all
such terms, as well as any other capitalized terms used herein
for which no definition is provided.
Affiliate of any specified Person means any
other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified
Person. For the purposes of this definition, control
(including, with correlative meanings, the terms
controlling, controlled by and
under common control with) as used with respect to
any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the
ownership of voting securities, by agreement or otherwise.
Attributable Debt with respect to any Sale
and Lease-Back Transaction that is subject to the restrictions
described under Additional Covenants of MGM
MIRAGE Limitation on Sale and Lease-Back
Transactions means the present value of the minimum rental
payments called for during the terms of the lease (including any
period for which such lease has been extended), determined in
accordance with generally accepted accounting principles,
discounted at a rate that, at the inception of the lease, the
lessee would have incurred to borrow over a similar term the
funds necessary to purchase the leased assets.
Consolidated Net Tangible Assets means the
total amount of assets (including investments in Joint Ventures)
of MGM MIRAGE and its Subsidiaries (less applicable
depreciation, amortization and other valuation reserves) after
deducting therefrom (a) all current liabilities of MGM
MIRAGE and its Subsidiaries (excluding (i) the current
portion of long-term Indebtedness, (ii) intercompany
liabilities and (iii) any liabilities which are by their
terms renewable or extendible at the option of the obligor
thereon to a time more than 12 months from the time as of
which the amount thereof is being computed) and (b) all
goodwill, trade names, trademarks, patents, unamortized debt
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discount and any other like intangibles, all as set forth on the
consolidated balance sheet of MGM MIRAGE for the most recently
completed fiscal quarter for which financial statements are
available and computed in accordance with generally accepted
accounting principles.
Credit Facility means the Fifth Amended and
Restated Loan Agreement, dated as of October 3, 2006, among
MGM MIRAGE, as Borrower, and MGM Grand Detroit, LLC, as
Co-Borrower, the Banks, Syndication Agent, Documentation Agents
and Co-Documentation Agents therein named, and Bank of America,
N.A., as Administrative Agent (and their successors and assigns
from time to time party thereto), including any related notes,
guarantees, collateral documents, instruments and agreements
executed in connection therewith, in each case as amended,
modified, renewed, extended, refunded, replaced or refinanced
from time to time.
Excluded Subsidiary means MGM Grand Detroit,
LLC and its Subsidiaries (including MGM Grand Detroit II,
LLC), MGMM Insurance Company, Circus Circus New Jersey, Inc., Go
Vegas, MGM MIRAGE Hospitality, LLC, MGM MIRAGE Online, LLC, Pine
Hills Development II, Revive Partners, LLC, M3 Nevada
Insurance Company, Nevada Landing Partnership (which owns 50% of
Grand Victoria) (but only until such time as we receive the
Illinois Gaming Approval), other subsidiaries that may from time
to time become Excluded Subsidiaries under the indenture (if,
among other conditions, such other subsidiaries are not
guarantors of our other indebtedness and are not subject to any
covenants in, or liens securing, the Credit Facility or the
Existing Senior Notes), and MGM MIRAGEs
non-U.S. Subsidiaries
whose only tangible assets are located in foreign nations and
their U.S. holding companies, provided such holding
companies have no other assets or operations and provided that,
except for MGM Grand Detroit, LLC to the extent of any amounts
of proceeds of borrowings under the Credit Facility made
available to MGM Grand Detroit, LLC, if any Excluded Subsidiary
becomes subject to the covenants in the Credit Facility
applicable to the Subsidiary Guarantors or grants any Liens to
secure the Credit Facility, or if any Excluded Subsidiary
guarantees or grants any Liens to secure any of the Existing
Senior Notes, such Excluded Subsidiary will thereafter not be an
Excluded Subsidiary.
Existing Senior Notes means (i) MGM
MIRAGEs 6% senior notes due 2009 in the original
aggregate principal amount of $1,050 million, (ii) MGM
MIRAGEs 8.50% senior notes due 2010 in the original
aggregate principal amount of $850 million, (iii) MGM
MIRAGEs 6.75% senior notes due 2012 in the original
aggregate principal amount of $550 million, (iv) MGM
MIRAGEs 6.75% senior notes due 2013 in the original
aggregate principal amount of $500 million, (v) MGM
MIRAGEs 5.875% senior notes due 2014 in the original
aggregate principal amount of $525 million, (vi) MGM
MIRAGEs 6.625% senior notes due 2015 in the original
aggregate principal amount of $875 million, (vii) MGM
MIRAGEs 6.875% senior notes due 2016 in the original
aggregate principal amount of $250 million, (viii) MGM
MIRAGEs 7.625% senior notes due 2017 in the original
aggregate principal amount of $750 million, (ix) the
Mandalay Senior Notes, and (x) the Mirage Notes.
Funded Debt means all Indebtedness of MGM
MIRAGE or any Subsidiary Guarantor which (i) matures by its
terms on, or is renewable at the option of any obligor thereon
to, a date more than one year after the date of original
issuance of such Indebtedness and (ii) ranks at least pari
passu with the notes or the applicable Subsidiary Guarantee.
Illinois Gaming Approval means the granting
of all necessary approvals by the Illinois Gaming Board for
Nevada Landing Partnership to guarantee the notes.
Incur means, with respect to any
Indebtedness, to incur, create, issue, assume, guarantee or
otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such
Indebtedness; provided that the accrual of interest shall not be
considered an Incurrence of Indebtedness.
Indebtedness of any Person means (i) any
indebtedness of such Person, contingent or otherwise, in respect
of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion
thereof), or evidenced by notes, bonds, debentures or similar
instruments or letters of credit, or representing the balance
deferred and unpaid of the purchase price of any property,
including any such indebtedness Incurred in connection with the
acquisition by such Person or any of its Subsidiaries of any
other business or entity, if and to the extent such indebtedness
would appear as a liability upon a balance sheet of such Person
prepared in accordance with generally accepted accounting
principles, including for such purpose obligations under capital
leases and (ii) any guarantee, endorsement (other than for
collection or deposit in the ordinary course of business),
discount with recourse, or any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire or to
supply or advance funds with respect to, or to become liable
with respect to (directly or indirectly) any indebtedness,
obligation,
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liability or dividend of any Person, but shall not include
indebtedness or amounts owed for compensation to employees, or
for goods or materials purchased, or services utilized, in the
ordinary course of business of such Person. For purposes of this
definition of Indebtedness, a capitalized lease
shall be deemed to mean a lease of real or personal property
which, in accordance with generally accepted accounting
principles, is required to be capitalized.
Joint Venture means any partnership,
corporation or other entity, in which up to and including 50% of
the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by MGM MIRAGE
and/or one
or more of its Subsidiaries.
Lien means any mortgage, pledge,
hypothecation, assignment, deposit, arrangement, encumbrance,
security interest, lien (statutory or otherwise), or preference,
priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any
of the foregoing).
Mandalay Senior Notes means (i) Mandalay
Resort Groups 6.375% Senior Notes due 2011 in the
original aggregate principal amount of $250 million;
(ii) Mandalay Resort Groups 6.50% Senior Notes
due 2009 in the original aggregate principal amount of
$250 million; (iii) Mandalay Resort Groups
9.50% Senior Notes due 2008 in the original aggregate
principal amount of $200 million; (iv) Mandalay Resort
Groups Floating Rate Convertible Senior Debentures due
2033 in the aggregate principal amount of $5.9 million;
(v) Mandalay Resort Groups 7% Debentures due 2036 in
the original aggregate principal amount of $150 million;
and (vi) Mandalay Resort Groups 6.7% Debentures
due 2096 in the aggregate principal amount of $4.3 million.
Mirage Notes means (i) Mirage Resorts,
Incorporateds 6.75% notes due 2007 in the original
aggregate principal amount of $200 million,
(ii) Mirage Resorts, Incorporateds 6.75% notes
due 2008 in the original aggregate principal amount of
$200 million and (iii) Mirage Resorts,
Incorporateds 7.25% debentures due 2017 in the original
aggregate principal amount of $100 million.
Nevada Landing Partnership means Nevada
Landing Partnership, an Illinois general partnership.
Non-recourse Indebtedness means Indebtedness
the terms of which provide that the lenders claim for
repayment of such Indebtedness is limited solely to a claim
against the property which secures such Indebtedness.
Obligations means any principal, interest,
premium, if any, penalties, fees, indemnifications,
reimbursements, expenses, damages or other liabilities or
amounts payable under the documentation governing or otherwise
in respect of any Indebtedness.
Person means any individual, corporation,
limited liability company, partnership, joint venture,
association, joint-stock company, trust, estate, unincorporated
organization or government or any agency or political
subdivision thereof or any other entity.
Principal Property means any real estate or
other physical facility or depreciable asset or securities the
net book value of which on the date of determination exceeds the
greater of $25 million and 2% of Consolidated Net Tangible
Assets.
Sale and Lease-Back Transaction means any
arrangement with a person (other than MGM MIRAGE or any of its
Subsidiaries), or to which any such person is a party, providing
for the leasing to MGM MIRAGE or any of its Subsidiaries for a
period of more than three years of any Principal Property which
has been or is to be sold or transferred by MGM MIRAGE or any of
its Subsidiaries to such person, or to any other person (other
than MGM MIRAGE of any of its Subsidiaries) to which funds have
been or are to be advanced by such person on the security of the
leased property.
Subsidiary of any specified Person means any
corporation, partnership or limited liability company of which
at least a majority of the outstanding stock (or other equity
interests) having by the terms thereof ordinary voting power for
the election of directors (or the equivalent) of such Person
(irrespective of whether or not at the time stock (or other
equity interests) of any other class or classes of such Person
shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned
by such Person, or by one or more other Subsidiaries, or by such
Person and one or more other Subsidiaries.
Treasury Securities mean any obligations
issued or guaranteed by the United States government or any
agency thereof.
S-22
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement
among us, the subsidiary guarantors and the underwriters, we
have agreed to sell to the underwriters, and the underwriters
have agreed to purchase from us, the principal amount of the
notes set forth opposite its name in the table below.
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Principal
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Underwriters
|
|
Amount
|
|
|
Citigroup Global Markets Inc.
|
|
$
|
|
|
Banc of America Securities LLC
|
|
|
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|
Deutsche Bank Securities,
Inc.
|
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|
Greenwich Capital Markets,
Inc.
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|
J.P. Morgan Securities, Inc.
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|
|
|
|
Total
|
|
$
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|
|
|
|
|
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|
The obligations of the underwriters under the underwriting
agreement, including their agreement to purchase notes from us,
are several and not joint. The underwriting agreement provides
that the underwriters will purchase all the notes if any of them
are purchased.
The underwriters initially propose to offer and sell the notes
at the price set forth on the cover page of this prospectus
supplement and may also offer notes to selling group members at
the offering price less a selling concession. The underwriters
may change such offering price and any other selling terms at
any time without notice. The underwriters may offer and sell
notes through certain of their affiliates.
In the underwriting agreement, we have agreed to indemnify each
underwriter and each person who controls any underwriter against
certain liabilities in connection with this offering, including
liabilities under the Securities Act of 1933, as amended (the
Securities Act), and to contribute to payments that
the underwriters may be required to make in respect thereof.
The notes are a new issue of securities for which there
currently is no market. The notes will not be listed on any
securities exchange or on any automated dealer quotation system.
The underwriters have advised us that following the completion
of this offering, they presently intend to make a market in the
notes. They are not obligated to do so, however, and any
market-making activities with respect to the notes may be
discontinued at any time at their sole discretion without
notice. In addition, such market-making activity will be subject
to the limits imposed by the Securities Act and the Securities
Exchange Act of 1934 (the Exchange Act).
Accordingly, we cannot give any assurance as to the development
of any market or the liquidity of any market for the notes.
Because, as described under Use of Proceeds, we
expect that more than 10% of the net proceeds of this offering
will be used to reduce outstanding indebtedness under our senior
credit facility, and the underwriters or affiliates of the
underwriters are lenders under our senior credit facility, this
offering is being conducted in accordance with the applicable
requirements of Conduct Rule 2710(h)(1) and Conduct
Rule 2720 of the National Association of Securities
Dealers, Inc. regarding the underwriting of securities of a
company with a member that has a conflict of interest within the
meaning of those rules. Conduct Rule 2720(c)(3) requires
that the yield at which a debt issue is to be distributed to the
public must be no higher than the price recommended by a
qualified independent underwriter which has participated in the
preparation of the registration statement and performed its
usual standard of due diligence in connection with that
preparation. Jefferies & Company, Inc. has agreed to act as
the qualified independent underwriter with respect to this
offering. We have agreed to indemnify Jefferies &
Company, Inc. in its capacity as qualified independent
underwriter against certain liabilities under the Securities Act.
In connection with this offering, certain of the underwriters
may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids. Over-allotment
involves sales in excess of the offering size, which creates a
short position for the underwriters. Stabilizing transactions
involve bids to purchase the notes in the open market for the
purpose of pegging, fixing or maintaining the price of the
notes. Syndicate covering transactions involve purchases of the
notes in the open market after the distribution has been
completed in order to cover short positions. Penalty bids permit
the underwriters to reclaim a selling concession from a broker/
S-23
dealer when the notes originally sold by such broker/dealer are
purchased in a stabilizing or syndicate covering transaction to
cover short positions. Any of these activities may prevent a
decline in the market price of the notes, and may also cause the
price of the notes to be higher than it would otherwise be in
the absence of these transactions. The underwriters may conduct
these transactions in the
over-the-counter
market or otherwise. If the underwriters commence any of these
transactions, they may discontinue them at any time.
We expect that delivery of the notes will be made to investors
on or
about ,
2007, which will be
the
business day following the date of this prospectus supplement
(such settlement being referred to as
T+ ).
Under
Rule 15c6-1
under the Exchange Act, trades in the secondary market are
required to settle in three business days, unless the parties to
any such trade expressly agree otherwise. Accordingly,
purchasers who wish to trade notes prior to the delivery of the
notes hereunder will be required, by virtue of the fact that the
notes initially settle in
T+ ,
to specify an alternate settlement arrangement at the time of
any such trade to prevent a failed settlement. Purchasers of the
notes who wish to trade the notes prior to their date of
delivery hereunder should consult their advisors.
From time to time, some of the underwriters or their affiliates
have provided, and may continue to provide in the future,
investment banking, general financing and banking services to us
and our affiliates and joint ventures for which they have
received, and expect to receive, customary transaction. Each of
the underwriters, or an affiliate of such underwriters, is a
lender under our senior credit facility.
LEGAL
MATTERS
The validity of the notes offered hereby will be passed upon for
us by Christensen, Glaser, Fink, Jacobs, Weil &
Shapiro, LLP, Los Angeles, California and by Lionel
Sawyer & Collins, Las Vegas, Nevada. Gary N. Jacobs,
who is of counsel to Christensen, Glaser, Fink, Jacobs,
Weil & Shapiro, LLP, is a member of our board of
directors and is also Executive Vice President, General Counsel
and Secretary of MGM MIRAGE. He beneficially owns an aggregate
of approximately 754,420 shares of our common stock.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy, at
prescribed rates, any document we have filed at the SECs
public reference room at 100 F Street, N.E.,
Washington, D.C. Please call the SEC at
1-800-SEC-0330
(1-800-732-0330)
for further information on the public reference room. The SEC
also maintains a website that contains reports, proxy and
information statements and other information regarding
registrants that file electronically with the SEC
(http://www.sec.gov). You also may read and copy reports and
other information filed by us at the office of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York
10005. The company also maintains a website at
www.mgmmirage.com.
We previously filed a registration statement and related
exhibits on
Form S-3
with the SEC on May 9, 2006 under the Securities Act. The
registration statement contains additional information about us
and our securities. You may inspect the registration statement
and its exhibits without charge at the office of the SEC at
Station Place, 100 F Street N.E., Washington, D.C. 20549,
and obtain copies, at prescribed rates, from the SEC.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference
information filed with it, which means that we can disclose
important information to you by referring you to the documents
containing such information. The information incorporated by
reference is an important part of this prospectus supplement,
and information filed later by us with the SEC will
automatically update and supersede this information.
We incorporate by reference the documents listed below and any
future filings made with the SEC by us under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act:
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Our Annual Report on
Form 10-K
for the year ended December 31, 2006;
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Our Current Reports on
Form 8-K
(to the extent filed and not furnished with the SEC) filed with
the SEC on February 15, 2007, March 23, 2007, April
13, 2007, April 18, 2007, and April 27, 2007; and
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S-24
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Our Definitive Proxy Statement filed with the SEC on
April 23, 2007.
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All documents and reports filed by us pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act
after the date of this prospectus supplement are deemed to be
incorporated by reference in this prospectus supplement from the
date of filing of such documents or reports, except as to any
portion of any future annual or quarterly reports or proxy
statements which is not deemed to be filed under those sections.
Any statement contained in a document incorporated or deemed to
be incorporated by reference in this prospectus supplement will
be deemed to be modified or superseded for purposes of this
prospectus supplement to the extent that any statement contained
herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference in this prospectus
supplement modifies or supersedes such statement. Any statement
so modified or superseded will not be deemed, except as so
modified or superseded, to constitute a part of this prospectus
supplement.
Any person receiving a copy of this prospectus supplement may
obtain, without charge, upon written or oral request, a copy of
any of the documents incorporated by reference except for the
exhibits to such documents (other than the exhibits expressly
incorporated in such documents by reference). Requests should be
directed to: Gary N. Jacobs, Executive Vice President, General
Counsel and Secretary, MGM MIRAGE, 3600 Las Vegas Boulevard
South, Las Vegas, Nevada 89109; telephone number:
(702) 693-7120.
A copy will be provided by first class mail or other equally
prompt means after receipt of your request.
S-25
PROSPECTUS
MGM MIRAGE
Debt Securities
Guarantees
Common Stock
We may, from time to time, offer to sell shares of our common
stock, par value $0.01 per share, and our debt securities,
which may be senior, senior subordinated or subordinated and
which may be convertible into shares of our common stock or
other debt securities. This prospectus also covers guarantees,
if any, of our obligations under any such debt securities, which
may be given by one or more of our subsidiaries. Our common
stock trades on the New York Stock Exchange under the symbol
MGM.
We may offer the securities separately or together, in separate
series or classes and in amounts, at prices and on terms to be
described in one or more supplements to this prospectus as well
as the documents incorporated or deemed to be incorporated by
reference in this prospectus. This prospectus describes only
some of the general terms that may apply to this securities. The
specific terms of any securities to be offered, and any other
information relating to a specific offering, will be set forth
in a supplement to this prospectus, in other offering material
related to the securities, or in one or more documents
incorporated or deemed to be incorporated by reference in this
prospectus. You should read this prospectus and any prospectus
supplement, as well as the documents incorporated or deemed to
be incorporated by reference in this prospectus, carefully
before you invest.
We or any selling security holder may offer and sell these
securities to or through one or more underwriters, dealers and
agents, or directly to purchasers, on a continuous or delayed
basis.
Our principal executive offices are located at 3600 Las Vegas
Boulevard South, Las Vegas, Nevada, 89109. Our telephone number
is
(702) 693-7120.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
None of the Nevada Gaming Commission, the Nevada Gaming
Control Board, the New Jersey Casino Control Commission, the New
Jersey Division of Gaming Enforcement, the Michigan Gaming
Control Board, the Mississippi Gaming Commission, the Illinois
Gaming Board nor any other gaming authority has passed upon the
accuracy or adequacy of this prospectus or the investment merits
of the securities offered. Any representation to the contrary is
unlawful. The Attorney General of the State of New York has not
passed upon or endorsed the merits of this offering. Any
representation to the contrary is unlawful.
The date of this prospectus is May 9, 2006.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission, or the
Commission, using a shelf registration
process. Under the shelf process, we may sell any combination of
the securities registered in one or more offerings. This
prospectus provides you with only a general description of the
securities offered by us. Each time we sell securities, we will
provide a prospectus supplement and may provide other offering
materials that will contain specific information about the terms
of that offering. The prospectus supplement or other offering
materials may also add, update or change information contained
in this prospectus or in documents we have incorporated by
reference into this prospectus. You should read both this
prospectus and any prospectus supplement or other offering
materials, together with the additional information described
under the headings Where You Can Find Additional
Information and Incorporation of Information by
Reference.
This prospectus, and any accompanying prospectus supplement or
other offering materials, do not contain all of the information
included in the registration statement, as permitted by the
rules and regulations of the Commission. For further
information, we refer you to the full registration statement on
Form S-3,
of which this prospectus is a part, including its exhibits. We
are subject to the informational requirements of the Securities
Exchange Act of 1934 and, therefore, file reports and other
information with the Commission. Statements contained in this
prospectus and any accompanying prospectus supplement or other
offering materials about the provisions or contents of any
agreement or other document are only summaries. If an agreement
or document is filed as an exhibit to the registration
statement, you should refer to that agreement or document for
its complete contents. You should not assume that the
information in this prospectus, any prospectus supplement or any
other offering materials is accurate as of any date other than
the date on the front of each document.
WHERE YOU
CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the Commission. You may read and copy
any document we file at the Commissions public reference
room at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Please call the Commission at
1-800-SEC-0330
to obtain information on the operation of the public reference
room. Our Commission filings are also available over the
Internet at the Commissions web site at
www.sec.gov. Our common stock is listed and traded on the
New York Stock Exchange, or the NYSE. You may also
inspect the information we file with the Commission at the
NYSEs offices at 20 Broad Street, New York, New York
10005. Our internet address is www.mgmmirage.com.
However, unless otherwise specifically set forth herein, the
information on our internet site is not a part of this
prospectus or any accompanying prospectus supplement.
INCORPORATION
OF INFORMATION BY REFERENCE
The Commission allows us to incorporate by reference
the information that we file with the Commission. This means
that we can disclose important business and financial
information to you by referring you to information and documents
that we have filed with the Commission. Any information that we
refer to in this manner is considered part of this prospectus.
Any information that we file with the Commission after the date
of this prospectus will automatically update and supersede the
corresponding information contained in this prospectus or in
documents filed earlier with the Commission.
We incorporate by reference the documents listed below:
MGM
MIRAGE:
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Our Annual Report on
Form 10-K
for the year ended December 31, 2005;
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Our definitive Proxy Statement filed with the Commission on
April 3, 2006;
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Our Current Reports on
Form 8-K
dated March 30, 2006, and April 7, 2006.
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1
Mandalay
Resort Group:
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Pages 84 to 119 of Mandalay Resort Groups Annual
Report on
Form 10-K
for the year ended January 31, 2005.
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We are also incorporating by reference any future filings that
we make with the Commission under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 (the
Exchange Act) after the date of this prospectus and
prior to the termination of the offering. In no event, however,
will any of the information that we disclose under
Items 2.02 and 7.01 of any Current Report on
Form 8-K
that we may from time to time furnish with the Commission be
incorporated by reference into, or otherwise included in, this
prospectus. Each document referred to above is available over
the Internet on the Commissions website at
www.sec.gov, and on our website at www.mgmmirage.com. You
may also request a free copy of any documents referred to above,
including exhibits specifically incorporated by reference in
those documents, by contacting us at the following address and
telephone number:
Gary N. Jacobs
Executive Vice President, General Counsel and Secretary
MGM MIRAGE
3600 Las Vegas Boulevard South
Las Vegas, Nevada 89109
(702) 693-7120
USE OF
PROCEEDS
Except as otherwise provided in the applicable prospectus
supplement, we expect to use the net proceeds from the sale of
the securities for general corporate purposes, which may include
reducing our outstanding indebtedness, increasing our working
capital, acquisitions and capital expenditures. Additional
information on the use of net proceeds from the sale of
securities offered by this prospectus may be set forth in the
applicable prospectus supplement or other offering material
relating to such offering. If the net proceeds from a specific
offering will be used to repay indebtedness, the applicable
prospectus supplement or other offering material will describe
the relevant terms of the debt to be repaid.
RATIO OF
EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed
charges for the periods indicated:
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For the Years Ended December 31,
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2001
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2002
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2003
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2004
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2005
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Ratio of Earnings to Fixed Charges
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1.43
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x
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2.09
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x
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1.86
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x
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2.27
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x
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1.92x
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Earnings consist of income from continuing operations before
income taxes and fixed charges, adjusted to exclude capitalized
interest. Fixed charges consist of interest, whether expensed or
capitalized, amortization of debt discounts, premiums and
issuance costs, and our proportionate share of interest cost of
unconsolidated affiliates.
DESCRIPTION
OF SECURITIES
We will set forth in the applicable prospectus supplement a
description of the debt securities, guarantees of debt
securities, or common stock that may be offered under this
prospectus.
Debt securities offered under this prospectus will be governed
by a document called an Indenture and possibly one
or more supplemental Indentures. Unless we specify otherwise in
the applicable prospectus supplement, the Indenture is a
contract between us, as obligor, a trustee chosen by us and
qualified to act under the Trust Indenture Act of 1939, and any
of our subsidiaries which guarantee our obligations under the
Indenture. A copy of the form of Indenture is filed as an
exhibit to the registration statement of which this prospectus
is a part. Any supplemental Indenture relating to the Indenture
will be filed in the future with the Commission. See Where
You Can Find Additional Information for information on how
to obtain a copy.
2
LEGAL
MATTERS
Certain legal matters with respect to securities offered hereby
will be passed upon for us by Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP, Los Angeles, California,
and Lionel Sawyer & Collins, Las Vegas, Nevada, and
for any selling security holder, by the counsel named in the
applicable prospectus supplement. Any underwriters or agents
will be represented by their own legal counsel, who will be
identified in the applicable prospectus supplement.
Gary N. Jacobs, who is of counsel to Christensen, Miller, Fink,
Jacobs, Glaser, Weil & Shapiro, LLP, is a member of
our board of directors and Executive Vice President, General
Counsel and Secretary of MGM MIRAGE. He and other attorneys in
that firm providing services to MGM MIRAGE in connection with
this prospectus beneficially own an aggregate of approximately
983,500 shares of our common stock.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The audited consolidated financial statements and schedule of
MGM MIRAGE as of December 31, 2005 and 2004 and for each of
the three years in the period ended December 31, 2005, and
managements report on the effectiveness of internal
control over financial reporting as of December 31, 2005,
incorporated by reference in this prospectus, have been audited
by Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated
in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The audited consolidated financial statements of Mandalay Resort
Group as of January 31, 2005 and 2004 and for each of the
three years in the period ended January 31, 2005, and
managements report on the effectiveness of internal
control over financial reporting as of January 31, 2005,
incorporated by reference in this prospectus, have been audited
by Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their reports, which are
incorporated herein by reference, which reports (1) express
an unqualified opinion on the financial statements and financial
statement schedule and include an explanatory paragraph relating
to Mandalay Resort Groups adoption of Statement of
Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets, (2) express an
unqualified opinion on managements assessment regarding
the effectiveness of internal control over financial reporting,
and (3) express an unqualified opinion on the effectiveness
of internal control over financial reporting, and have been so
incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained or
incorporated by reference in this prospectus supplement or the
accompanying prospectus. You must not rely on any unauthorized
information or representations. This prospectus supplement and
the accompanying prospectus is an offer to sell only the notes
offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information
contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus is current only as of
its
date.
3
$
% Senior
Notes due 2016
PROSPECTUS SUPPLEMENT
,
2007
Citi
Banc of America Securities
LLC
Deutsche Bank
Securities
JPMorgan
RBS Greenwich Capital