• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Features
  • Industry Talk
  • Trends & Tech
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Studio City borrower to offer notes to repay loan

Nov 16, 2016 Newsdesk Latest News, Macau, Top of the deck  


Studio City borrower to offer notes to repay loan

Studio City Co Ltd, the borrower under a US$1.4-billion senior secured facility agreement used to finance construction of Macau casino resort Studio City, is proposing to conduct an international offering of senior secured notes due in 2019, plus senior secured notes due 2021.

The net proceeds from the proposed offering will be used – together with cash on hand – “to fund the repayment in full” of the HKD10.86-billion (US$1.4-billion) senior secured term loan and revolving facilities agreement, dated January 28, 2013, the company said in a Tuesday press release.

Macau casino operator Melco Crown Entertainment Ltd owns a 60-percent interest in Studio City, with New Cotai LLC owning the remaining 40 percent. The property started operations on October 27 last year.

The 2013 loan agreement requires compliance with several minimum financial condition requirements by March 31, 2017. Melco Crown has said in previous filings that in order for Studio City Co to meet such requirements, “the ramp-up of Studio City operations must be significantly accelerated”.

“The new capital structure will most certainly be more expensive as the new notes should likely carry a higher rate of interest than the existing credit facility,” said brokerage Brokerage Sanford C. Bernstein Ltd in a Tuesday note.

“The key benefits of the refinancing are likely: 1) to push out maturities as the existing credit facility was due to mature in January 2018 (along with interim quarterly principal amortisations); and 2) to revise financial covenants which likely would have been breached for the first quarter 2017 covenant tests (we will need to wait to see what the new covenants will be),” said analysts Vitaly Umansky, Zhen Gong and Yang Xie.

Fitch Ratings Inc said in a report in September that the current operational performance of Studio City indicated that the property is “likely to fail” its first financial tests concerning its borrowings relative to its earnings.

The rating agency additionally suggested that Melco Crown might at some stage seek to increase its equity holding in the Studio City project.

Sanford Bernstein said in its Tuesday note: “The key indication from this refinancing in our view is that a buyout of the 40 percent minority investor in Studio City will not occur in the near term.”

Since Studio City’s launch, a number of investment analysts had commented that the property had been underperforming in the Macau market in casino gross gaming revenue (GGR) terms relative to its number of gaming tables in operation.

Melco Crown, controlled by entrepreneur Lawrence Ho Yau Lung, told GGRAsia on November 2 that the Studio City property – which launched without any VIP gambling operations – would commence high roller play on November 5.

Melco Crown has previously stated that Studio City “sits within a separate, ring-fenced credit group and Studio City’s debt obligations are not guaranteed by its shareholders”.

The new notes to be offered would be guaranteed by Studio City Investments Ltd and all of the subsidiaries of Studio City Co. Melco Crown itself will not be a guarantor for the notes, according to Tuesday’s press release.

Studio City Co has also entered into a commitment letter on November 9 with a lender for senior secured credit facilities in an aggregate amount of HKD234 million, which will be due in 2021. They consist of a HKD1-million term loan facility and a HKD233-million revolving credit facility, the firm said.


  • tweet
Related articles
  • Gaming magnates slip in Forbes list of HK richest
    Gaming magnates slip in Forbes list of...

    Feb 14, 2019  

  • Bloomberry gets US$766mln loan for Quezon casino scheme
    Bloomberry gets US$766mln loan for...

    Feb 12, 2019  

More news
  • Casino architects Steelman Partners name new chief
    Casino architects Steelman Partners...

    Feb 18, 2019  

  • Landing’s Jeju casino hosting Triton Poker tour stop
    Landing’s Jeju casino hosting Triton...

    Feb 18, 2019  


Latest News

Casino architects Steelman Partners name new chief

Casino architects Steelman Partners name new chief

Feb 18, 2019  

Casino design specialists Steelman Partners LLP have named Steve Anderson as the company’s new president after Ethan Nelson’s resignation in December. Mr Anderson has been a senior project...
Read More
Landing’s Jeju casino hosting Triton Poker tour stop

Landing’s Jeju casino hosting Triton Poker tour stop

Feb 18, 2019  

Scorgie heads Indo Pacific’s new table games team

Scorgie heads Indo Pacific’s new table games team

Feb 18, 2019  

Budget hotel rule tweaks may aid Macau tourism: reps

Budget hotel rule tweaks may aid Macau tourism: reps

Feb 18, 2019  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

”We expect it [the first phase of casino resort Hoiana in Vietnam] to open in October, and by then basically 90 percent of the first-phase content will be launched – such as the golf course, and hotels”

Andrew Lo Kai Bong

Executive director of project investor Suncity Group



Most Popular

  • No local Vietnam players at Hoiana launch: SuncityNo local Vietnam players at Hoiana launch: Suncity February 15, 2019
  • Beijing new grey money curbs with unclear impact on MacauBeijing new grey money curbs with unclear impact on Macau February 15, 2019
  • Universal Ent back to profit after Wynn Resorts settlementUniversal Ent back to profit after Wynn Resorts settlement February 15, 2019
  • MGM Resorts places all-in bet on Osaka for Japanese casinoMGM Resorts places all-in bet on Osaka for Japanese casino February 15, 2019
Copyright 2014-2019 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us