Activist investor Carl Icahn and private equity fund Oaktree Capital Management have amassed hundreds of millions of dollars of MGM Mirage bonds and have told the troubled casino firm it should quickly overhaul its massive debts in bankruptcy, the Wall Street Journal reported, citing people familiar with the matter.

The two investors contacted MGM Mirage last month to express their views that a bankruptcy is the best option, and said they would put their weight behind such a move, the paper said.

Oaktree and Icahn were not immediately available for comment.

MGM Mirage's 6.5 percent bond due 2009 fell 5.75 cents to 77 cents on the dollar, according to MarketAxess.

The No. 2 casino operator is trying to find ways to service its $13.5 billion debt and fund payments on its $8.6 billion City Center project in Las Vegas. Controlled by billionaire Kirk Kerkorian, the company is grappling with weak consumer demand and reduced access to credit.

(Additional reporting by Karen Brettell)