Casino operator Melco Resorts and Entertainment Ltd said in a Monday filing to Nasdaq that it proposed to offer 5.750-percent senior notes due in 2028, that would be additional to the US$500-million in such notes it had confirmed in July. The offer will be conducted via Melco Resorts Finance Ltd.
Such an exercise would take recent fundraising by the group and associated businesses to over US$2 billion.
The net proceeds of the newly-flagged additional notes – the gross amount of which is still to be determined – would be used for “general corporate purposes”.
Melco Resorts has most of its business in Macau, where its flagship resort is City of Dreams (pictured). The company also operates casinos in the Philippines and the Republic of Cyprus.
The Macau gaming market has remained open during the Covid-19 global crisis, apart from a 15-day pause in February. But for the calendar year to July 30, Macau market casino gross gaming revenue was down nearly 80 percent year-on-year.
In a mid-July update, Melco Resorts said its daily operating costs during the second quarter were “approximately US$1.5 million”.
In its first-quarter earnings call in May, Melco Resorts mentioned it had brought down its daily Macau operating costs from about US$3 million before Covid-19, to US$2.5 million, and down again to US$2.2 million.
Melco Resorts’ Cyprus casinos reopened in mid-June, after being shuttered since mid-March due to Covid-19 prevention measures on the Mediterranean island.
But City of Dreams Manila, the Philippine gaming resort managed by the group, has been closed since mid-March due to the pandemic. On Sunday, the country’s government said it was retightening the quarantine protocols for Metro Manila from Tuesday (August 4) until at least August 18, due to an uptick in Covid-19 infections locally.
Melco Resorts controls Studio City International Holdings Ltd and runs the gaming operations at the Studio City gaming complex in Macau.
A subsidiary of Studio City International Holdings announced in July plans to raise an aggregate of US$1 billion via a dual-tranche offering of senior notes.
The net proceeds of that overall offering were to be used to redeem in full senior secured notes due in 2021 issued by a Studio City Finance unit, it noted in a July 8 announcement. The proceeds were also to be used to fund in part the capital expenditure of the remaining expansion project for Studio City.
Studio City International Holdings also recently conducted private offers for its shares, raising gross proceeds of US$500 million, to be used for the development of phase two of its casino resort and for general corporate purposes.
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Vitaly Umansky, Kelsey Zhu and Tianjiao Yu
Analysts at brokerage Sanford C. Bernstein