Magna to raise cash via notes

Magna Entertainment Corp., the largest racetrack operator in the United States, plans to raise $48.5 million by selling notes bearing

7.25 percent in interest annually, the company said Tuesday.

The money will be used for general purposes, Magna said in a statement, including some capital expenditures.

The notes will be due Dec. 15, 2009, and can be converted to Magna stock at a price of $8.50 a share after Dec. 21, 2005.

Magna's stock dropped 63 cents, or 8.6 percent, on Tuesday, to $6.69, on extremely heavy volume of 2.2 million shares. Average volume for the company is approximately 300,000 shares a day.

This year, Magna closed a deal to purchase Lone Star Park for

$99 million, and it recently received approval from state regulators to buy majority shares in Laurel Park and Pimlico Race Course in Maryland in a deal valuing the tracks at $117 million.