MGM, Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan

[marmar]

from Bloomberg:



MGM, Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan

By Pierre Paulden and Jonathan Keehner

July 29 (Bloomberg) -- MGM Mirage and Dubai World are late in raising as much as $3.5 billion for their $11.2 billion CityCenter project in Las Vegas because banks saddled with debt to casinos and hotels are wary of making new loans.

Deutsche Bank AG and Credit Suisse Group, the Zurich-based bank that advised Dubai World last year when it invested $5.1 billion in MGM, are among the holdouts, bankers with knowledge of the matter said. Funding was supposed to be completed by the end of June, MGM Chief Financial Officer Daniel D'Arrigo told analysts in May. President James Murren said Frankfurt-based Deutsche Bank has been part of every MGM loan since 1998.

``No company in America is having an easy time doing bank deals right now,'' Murren said in an interview. ``There will be some banks that can't commit because they have a lot of exposure in the area or don't like the pricing.''

Deutsche Bank, the biggest German bank, hasn't yet made a decision on financing CityCenter, said spokesman John Gallagher in New York. ``We continue to evaluate the opportunity,'' he said. Duncan King, a New York-based spokesman for Credit Suisse, the second-largest Swiss bank, declined to comment.

``Wall Street firms are scrutinizing their extension of credit, particularly to the gaming industry, where the sentiment is pretty weak,'' said Michael Paladino, an analyst at Fitch Ratings in New York.

The amount of commercial and industrial loans from banks, plus short-term commercial paper, fell almost 3 percent during the past year to $3.27 trillion, according to data compiled by the Federal Reserve. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=alHxxqo1pZ_Y&refer=home

[Atman]

1. CityCenter is an abomination on the City of Abominations.

Is it impression? Absolutely. One of the most impressive undertakings I've ever seen. The plans, the design, the very idea, can't fail to impress. Except for the stupidity of it all. Another giant city complex being erected in the middle of a desert with no resources of its own. It SHOULD fail, it should fail miserably, and Dubai and MGM should take their lumps and everybody should stand back and realize this type of pie-in-the-sky construction project has no place going on in a broke-ass country in a state with no water.

.

[DCKit]

2. Not SHOULD fail, WILL fail.

http://www.citycenter.com/

Studio condos from $500K (~$1,000/s.f.). The newly homeless will be lining up at those prices and will probably buy an apartment for each member of the family.

[RNdaSilva]

3. The plans...

http://www.citycenter.com/vision/default.aspx

[gratuitous]

4. All right, NOW things are starting to look serious

I mean, when a bunch of inexperienced speculators in house flipping take it in the shorts, people say it's their own fault. And when a bunch of first-time homebuyers get dry-gulched by predatory lenders, people will still say it's their own fault. But when the overrich are denied credit and can't package a loan for some hare-brained development scheme, Something Must Be Done!