Melco Resorts Finance Ltd has priced its offering of US$500-million in 6.500-percent senior notes due in 2033, according to a Tuesday filing. The entity is the financing arm of global casino operator Melco Resorts & Entertainment Ltd.
Melco Resorts Finance affirmed in the update it intends to use the proceeds from the new notes offering “to fund the conditional cash tender offer announced by Melco Resorts Finance on September 15, 2025, for any and all of its validly tendered outstanding 5.250 percent senior notes due 2026”.
The new notes are being offered and sold in the United States to qualified institutional buyers.
They will be senior obligations of Melco Resorts Finance, “ranking equally with all of Melco Resorts Finance’s existing and future senior indebtedness,” the unit said. Melco Resorts & Entertainment will not be a guarantor of the new notes.
Moody’s Ratings Inc said in a Tuesday memo it had assigned a ‘Ba3’ rating to the proposed new notes. Under Moody’s system, ‘Ba’ ratings are judged to have “speculative elements and are subject to substantial credit risk”.
Moody’s assigned a ‘stable’ outlook, noting that Melco Resorts Finance will use the proceeds from the new notes, “mainly for refinancing purposes”.
Moody’s said the finance entity’s ratings “reflect the consolidated credit quality” of the Melco group.
Stephanie Lau, a Moody’s Ratings vice president and senior credit officer, was cited saying: “Melco Resorts Finance’s Ba3 rating primarily reflects Melco Resorts’ established operations and high-quality assets, as well as our expectation that its financial leverage will gradually improve over the next 12 to 18 months, underpinned by continued growth in Macau’s overall gaming revenues and their strengthening market position.”
The ratings institution added those considerations mitigate the risk associated with the Melco group’s “geographic concentration” in Macau, which has a ‘Aa3’ negative, rating from Moody’s, and where “gross gaming revenue (GGR) is subject to policy changes in Macau and China (A1 negative)”.
Although the casino group has the bulk of its operations in Macau, it also operates venues in the Philippines, the Republic of Cyprus, and Sri Lanka.
Moody’s memo said the institution expected the casino operating entity to see its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) improve to around US$1.3 billion in 2026, from US$1.1 billion in 2024.
“This will be largely driven by higher gaming volumes and revenues across all segments, including VIP and premium mass, as well as steady profitability,” stated Moody’s.
“With increased earnings and the completion of major capital spending projects, MRE will continue to generate free cash flow and gradually reduce its debt over the next 12-18 months,” added the ratings institution.
As a result, Moody’s expects the casino operating unit’s adjusted debt/EBITDA to improve to around 5.4x in 2026 from 6.7x in the last 12 months to June 30.
“The projected ratio is in line with the Ba3 rating category,” said Moody’s.
