MGM Resorts International is planning a $750 million bond saleafter failing last month to persuade all of its lenders to extendthe due date on loans.

The biggest casino operator on Las Vegas's Strip will issue10-year notes to help pay $965 million owed to term loan lenders asof March 14 that refused to extend commitments as well as to payback other outstanding borrowings, MGM said in a statement today.The Las Vegas-based company extended the maturity on $1.8 billionof loans to February 2015 while $1.3 billion remains due inFebruary 2014, MGM said in a Feb. 27 regulatory filing.

MGM is returning to the bond market as speculative-grade yieldstumble to 7.6 percent as of yesterday from as high as 10.2 percentin October, according to Bank of America Merrill Lynch index data.The company sold $850 million of 8.625 percent, seven-year notes inJanuary at the lowest unsecured interest rate it has obtained sincebefore the economic downturn, Dan D'Arrigo, MGM's chief financialofficer and treasurer, said in a Feb. 22 conference call.

MGM's average borrowing cost on outstanding debt is 8 percent,“so for every 1 percent improvement in rate that we can achieve,that's an incremental $125 million in interest rate and incrementalfree cash flow to our company,” he said. “As we go forward, webelieve there will be more opportunities to further reduce theseborrowing costs and improve our overall free cash flow.”

MGM sold 10-year notes in March 2010, issuing $845 million of 9percent senior secured debt that priced to yield 529 basis pointsabove similar-maturity Treasuries, according to data compiled byBloomberg. The securities traded at 111.75 cents on the dollar toyield 7 percent as of March 9, according to Trace, the bond-pricereporting system of the Financial Industry RegulatoryAuthority.

The casino operator will “need to be a constant issuer” in thedebt market as it faces $8.5 billion of maturities in the next fouryears, CreditSights Inc. analysts wrote in a March 6 researchnote.

About 62 percent of holders of MGM's $3.5 billion creditfacility agreed to push out the due date to Feb. 23, 2015, fromFeb. 21, 2014, the company said in the filing last month. Lendersthat extended can receive a 20 percent reduction in their creditexposure, according to the filing.

The company's bonds issued in January were boosted from aplanned $500 million bond sale to $850 million based on demand,D'Arrigo said in the conference call last month.

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