Resorts World Las Vegas LLC (RWLV) and RWLV Capital Inc – both indirect wholly-owned subsidiaries of Malaysia-listed Genting Bhd – have priced their offering of US$400 million aggregate principal amount of 8.450-percent senior notes due 2030, said the parent in a Thursday filing. The group promotes the US$4.3-billion Resorts World Las Vegas in Nevada, in the U.S., which opened in June 2021.
The coupon of the senior notes at 8.450 percent per annum is payable on a semi-annual basis, according to the filing. The notes are supported by a keepwell deed to be provided by Genting Bhd.
The net proceeds from the exercise – together with cash on hand – will be first used to repay the “entire outstanding borrowings under the subordinated intercompany note of US$300 million”, plus accrued interest thereon that was fully drawn by RWLV on June 28, stated the filing. The proceeds thereof were applied to prepay a portion of the existing senior secured credit facilities in connection with the closing of the extension and amendment to its new US$800 million senior secured credit facilities.
“The remainder of the proceeds, if any, will be used to repay all or a portion of the borrowings outstanding under the senior secured credit facilities and to pay transaction fees and expenses associated with the offering,” the filing added.
Fitch Ratings has assigned a “BBB-” rating to the RWLV group’s senior notes, which rank pari passu with its existing US$1.35 billion notes due in 2029 and 2031.
“We rate RWLV on a top-down basis and one notch below its stronger parent, Genting Bhd, given ‘high’ strategic and ‘medium’ operational incentives for the parent to provide support,” said the ratings agency in a Monday note.
The ratings agency said the ‘high’ strategic incentive Genting Bhd has in supporting RWLV is due to the latter’s “financial contribution and competitive advantage”.
“We expect RWLV to contribute over 20 percent of Genting Bhd’s proportionately consolidated EBITDAR [earnings before interests, taxation, depreciation, amortisation and restructuring or rent costs] from 2024,” stated Fitch. “The ‘medium’ operational incentive is driven by the sharing of the Resorts World brand and integrated management decision-making, despite limited operational synergies, as Genting Bhd’s casinos operate independently,”
The institution expects the Resorts World Las Vegas property to ramp-up towards an EBITDAR of US$350 million by 2025, from about US$115 million in 2022.
