MGM NOTES FROM LAS VEGAS

Here are our MGM notes from the Las Vegas meetings.

LVCVA announced that they got six new conventions.  Aria is pricing above Bellagio 80% of the time over the next few months – not what we’ve heard.

For Aria - will room revenue as a % of total be smaller than their other properties?

Probably, given all the condo hotels.   We will start with a block of rooms on December 16th and then scale up the opening through January 1st.  Vdara – 1,500 rooms,1/2 condo 1/2 hotel, of that amount open by January.  Booked 45% of the 750 condos that are available.  They prefer to walk those condo customers over to Veer.  Veer has 750 units - 65% have been contracted out.  Will not offer financing to condo hotel buyers.  Condo owner can't contractually rent those units for less than 6 months at a time. Don't know how many of their buyers will be able to close.

Rough start to marketing Aria's convention business.

High end has the biggest swing between week and weekend rates.

Crystals will open with 30% of the 500 salable square feet. 85% is contracted out. $130 per square foot rates - $30mm in EBITDA initially and then scale. 

Funding gap post opening - $244mm is the gap.  Next $490mm goes to DB, next goes to them, and the next gets split 50/50.  Another unsecured deal - have $2bn of maturities - Macau IPO, leveraging up City Center next year, secured is cheapest option but that option is small.  MGM would still look at asset sales.  Equity linked products are a painful way to go.

They would rather shutter floors than drop pricing on Aria.  Pre-opening will flow through the income statement not through the equity and affiliates line.  $5bn new cost base over 20-25 years.

Plan to recap City Center and dividend back the proceeds.

“No way” to PNK acquisition.

Think they can get $800mm- $1bn out of MGM macau - 50% to them. Think they can do $300mm next year in ebitda.  Secured basket is a little under a $1bn now.  Convert is a last option. Haven't had deep discussions with the banks on rollover.

Didn't comment on the $150 ADR we had been hearing for Aria. 

A lot of the conventions for 4Q09 were canceled and it is still hurting the city.

Think that they will be able to hold rate next year/raise rates in 2010 given their occupancy. Pretty significant portion of rooms booked through OTAs.

AC not super excited about that market for next year. IPO in Macau may make them more comfortable.

This past weekend was very good.