MGM Mirage (MGM) announced plans to sell $350 million of nine-year notes through a private placement, using the proceeds to repay credit-line borrowings.

Meanwhile, the company slashed the size of its planned debt swap after investors largely ignored the effort. Now, just $25 million of new notes will be issued, not the $500 million planned when the offer was made last month. Then, MGM offered to swap $782 million in notes due next year for up to $500 million of higher-yielding notes that mature in 2016.

But investor response has been scant, as just $21 million of notes were tendered as of Wednesday.

The company, like many in the casino industry, became heavily indebted this decade, due to takeovers and construction of new facilities. MGM is set to begin opening its $8.6 billion CityCenter development in Las Vegas at year's end.

Many companies have been tapping improved investor sentiment to raise capital through stock and/or debt sales, with numerous firms putting the proceeds toward paying off near-term leverage. MGM sold $2.5 billion in stock and debt earlier this year.

MGM shares closed Wednesday at $12.40 and were inactive premarket. The stock is down 54% the last year the company's performance has worsened as the recession drags on.

-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354; kevin.kingsbury@dowjones.com