KUALA LUMPUR: Genting Malaysia Bhd's (GENM) sub-subsidiary Resorts World Ltd has completed the subscription of US$18 million (RM59.4 million) 9% senior secured notes issued by MGM Mirage, Inc due in March 2020.

In a statement on Wednesday, March 17, GENM said MGM had offered the notes as part of its placement of US$845 million of the notes, the proceeds of which would be used to repay part of its outstanding debts. MGM had on Tuesday announced the completion of the placement exercise.

"The notes are secured by a mortgage on MGM Grand Las Vegas, the real property on which MGM Grand Las Vegas is located and substantially all existing and future property of MGM Grand Hotel, LLC, and upon receipt of the necessary gaming approvals, a pledge of the limited liability company interests in MGM Grand Hotel, LLC," GENM said.

It said the notes were general senior obligations of MGM, guaranteed by substantially all of its subsidiaries, which also guaranteed MGM's other senior indebtedness, and equal in right of payment with, or senior to, all existing or future indebtedness of MGM and each guarantor.

GENM said the notes presented a good opportunity for the group to expand its investment portfolio and enhance returns on its existing cash balances.

"With a coupon rate of 9%, the investment generates an attractive return compared to what is currently attainable in the money markets or in other secured investments regionally, especially within the GENM group's core leisure and hospitality industry," it said.

GENM added that the notes would be secured against high quality gaming assets, thereby giving downside risk protection to the investment.

MGM, which is listed on the New York Stock Exchange, is one of the leading casino entertainment providers in the world, with ownership stakes and operation of properties in Nevada, Mississippi, Michigan, New Jersey, Illinois and Macau.

For the financial year ended Dec 31, 2009, MGM group recorded net revenues of about US$6 billion.