Melco Resorts Finance Ltd announced an international offering of senior notes, consisting of US$900 million worth of 5.375-percent senior notes due 2029, priced at 100 percent, according to a Tuesday statement.
In a separate Monday statement announcing the offering, Melco Resorts Finance said it would use the net proceeds from such offering to make a full repayment of a 2015 borrowing exercise by a subsidiary, Melco Resorts (Macau) Ltd, under a revolving credit facility; as well as to make a partial prepayment of an amount borrowed by that Macau entity under amended and restated credit facilities in the same year.
Melco Resorts Finance is an arm of Melco Resorts and Entertainment Ltd, a Nasdaq-listed developer and operator of casinos in Asia and elsewhere.
Melco Resorts (Macau) holds Melco Resorts and Entertainment’s gaming licence in Macau.
Melco Resorts has earmarked “US$1.35 billion to US$1.4 billion” for the extension of its majority-owned Studio City casino resort in Macau’s Cotai district, the firm noted on a call held late last month to discuss its third-quarter earnings.
Melco Resorts Finance said in its Monday announcement that the proposed new notes would be ranked as senior obligations, equal to all its present and future senior indebtedness. The parent company Melco Resorts will not be a guarantor of the new notes, the Monday statement mentioned.
Lawrence Ho Yau Lung, chairman and chief executive of Melco Resorts, had said on the third-quarter call that its ratio for net debt versus earnings before interest, taxation, depreciation and amortisation (EBITDA) remained “low” at approximately “two times” as of September 30.
He added such a ratio would permit Melco Resorts to continue its recurring dividend programme, while “retaining ample financial flexibility to reinvest in…existing properties and to pursue newer development opportunities”.
The group is interested in obtaining a Japan casino licence. An aggregate capital spend of as much as US$10 billion has been mentioned by Mr Ho as the potential price of securing such rights, although there are no details yet of how capital costs would be structured for licence suitors. Earlier this year, Melco Resorts’ chief financial officer Geoffrey Davis said he anticipated the group might be expected to go 50:50 with a local partner on capital spend in Japan.
(Updated at 9.39am, Nov 27)
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Adjusted EBITDA reported by Asian casino operator Melco Resorts and Entertainment for the fourth quarter of 2020