Herbst Gaming owns eight casinos, each of which carries the company's "Terrible's" brand. Five of the casinos are in Nevada and the others are in Missouri and Iowa. Company president Ed Herbst eluded in a prepared statement that the Primm Valley properties would be converted to the company's "Terrible's" brand. Lehman Brothers and Wachovia Securities served as financial advisors to Herbst and Gibson Dunn and Crutcher LLP acted as legal counsel.

In mid-October, MGM Mirage agreed to sell its only two gaming properties in Laughlin, NV, 95 miles southeast of Vegas on the Arizona border, for $200 million. The Colorado Belle and Edgewater hotel-casinos are being sold to Anthony Marnell III, who recently received preliminary approvals for a $1.8-billion mixed-use casino, resort and commercial center on Las Vegas Boulevard, several miles south of McCarran International Airport. The Laughlin sale is expected to close in mid-2007.

Both the Primm and Laughlin deals follow the early October amendment and restatement of its $7-billion loan agreement. Among other things, the transaction revised the terms of the maximum total leverage ratio and interest charge coverage ratio covenants. An MGM source tells GlobeSt.com the $600 million in asset sales are unrelated to requirements of the new loan agreement.

The amended senior credit facilities consist of a $4.5 billion senior revolving credit facility and a $2.5 billion senior term loan facility. The facilities include an increase option whereby MGM may solicit either existing lenders or new lenders to increase the maximum borrowing capacity to $8.0 billion.

MGM officials say that between the credit facility and the company's internally generated cash flow, the company will have the necessary capital to finance its growth initiatives, the most visible of which is its 66-acre CityCenter development on the Las Vegas Strip. Scheduled to open in 2009, the development includes a 60-story, 4,000-room hotel-casino; two 400-room, non-gaming hotels; 500,000 sf of retail shops, dining and entertainment venues; and 2,800 luxury residential units.

In addition, the company is developing a new MGM Grand hotel and casino complex on 25 acres in downtown Detroit, and has a 50% interest in MGM Grand Macau, a hotel-casino resort currently under construction in the Macau Special Administrative Region of the People's Republic of China.