Macau casino operator MGM China Holdings Ltd says it has arranged a revolving credit facility with a group of lenders, making available up to HKD23.40 billion (US$3.02 billion).
The agreement took effect on Tuesday (April 15), and the maturity date is 60 months from then, said a Tuesday filing to the Hong Kong Stock Exchange. The facility takes effect on April 22, the date of the first utilisation.
MGM China runs the MGM Macau resort (pictured) on the city’s peninsula, and MGM Cotai in the newer casino district.
The 2025 revolving credit facility will bear interest at a fluctuating rate per annum based on the Hong Kong Interbank Offered Rate (HIBOR) plus a margin in the range of 1.625 percent to 2.75 percent, the latter to be “determined by the company’s leverage ratio”.
It includes an “accordion option,” which in banking is typically defined as the possibility, from the outset of the deal, for the borrower to increase the amount of principal.
Tuesday’s statement from MGM China said: “The proceeds of the revolving credit facility will be used to refinance the existing revolving credit facility and second revolving credit facility… for ongoing working capital needs and general corporate purposes of the group.”
The first of those pre-existing revolving facilities was initially agreed in August 2019 in an aggregate amount of HKD9.75 billion with subsequent amendments and extensions, so that its final maturity date was extended to May 15, 2026.
The second of the pre-existing revolving facilities was first agreed with a group of lenders in May 2020 for an initial aggregate amount of HKD2.34 billion. The aggregate was subsequently increased to HKD3.12 billion, and could be increased up to HKD5.85 billion, and the maturity date had also been extended to May 15, 2026.
“The increase option under the second revolving credit facility has been fully exercised to date,” noted Tuesday’s update.
The document noted: “With effect from April 22, 2025, the date of the first utilisation of the 2025 revolving credit facility, the amounts due under the existing credit facilities will be repaid in full and the total commitments thereof will be cancelled in full.”
A change of control provision applies also to the newly-announced 2025 revolving credit facility.
It must be repaid if United States-based casino group MGM Resorts International “ceases to be the legal and beneficial owner directly or indirectly of more than 50 percent of the issued ordinary share capital” of MGM China.
