Bloomberry Resorts Corp’s fresh PHP72.0-billion (US$1.25-billion) refinancing facility is under terms that “should help earnings and cash flow”, says Morgan Stanley Asia Ltd.
The announcement of the new loan by the Philippines-based casino-resort operator came on Tuesday.
Bloomberry had explained in a filing to the Philippine Stock Exchange that the new facility would replace an existing PHP73.5-billion syndicated term loan obtained in 2018, and a PHP20-billion additional term loan facility that its unit Bloomberry Resorts and Hotels Inc obtained in December 2020.
“The new loan should be fully drawn, implying Bloomberry has paid down PHP2-billion in debts post-the second quarter,” said Morgan Stanley analysts Gareth Leung and Praveen Choudhary, in Wednesday commentary.
Bloomberry runs Solaire Resort & Casino in the Philippine capital Manila, and in May opened Solaire Resort North (pictured), another gaming complex in Quezon City, northeast of Manila.
The analysts observed, referring to a loan benchmark rate of the Bankers Association of the Philippines: “The rate of the new loan is Philippine peso BVAL five years plus 1 percent spread. The old facility had a spread of 1.75 percent.
“Thus, Bloomberry is saving 75 basis points [of] spread or PHP540 million in annual interest expenses… This is equivalent to 5.7 percent of 2023 net income or 6.8 percent of first-half 2024 annualised net income,” added the Morgan Stanley analysts.
They also stated: “Bloomberry has the option to fix the loan rate within 12 months. This may help save more interest expense if Philippine peso BVAL rate falls more.”
The new facility would also mean a “lighter principal payment” regime, said Morgan Stanley.
“The new loan requires PHP2.2-billion annual payments in 2025 and 2026, versus old loans of PHP7.4-billion plus PHP3-billon each for both years.”
For the three months to June 30, Bloomberry reported consolidated net income of just under PHP1.34 billion, down 49.1 percent sequentially on the first quarter’s PHP2.63 billion, and down 61.1 percent year-on-year.
As of June 30, Bloomberry had just under PHP99.45 billion in long-term debt, a figure that had risen 4.8 percent year-on-year, according to its second-quarter results issued in August. In the same period, equity attributable to equity holders of the parent company had narrowed by 27.5 percent year-on-year, to just below PHP35.08 billion.
