GGRAsia – Melco sets 7.625pct interest rate for US$750mln notes offer

Melco sets 7.625pct interest rate for US$750mln notes offer

Apr 10, 2024 Newsdesk Latest News, Top of the deck, World

The financing unit of global casino operator Melco Resorts & Entertainment Ltd has set the interest rate for its international offering of US$750-million in aggregate principal amount new senior notes, at 7.625 percent, with the new notes due in 2032.

The new notes were priced at 100 percent, announced Melco Resorts Finance Ltd in a Tuesday filing in the United States. The offer will be for qualified institutional investors.

The financing arm said net proceeds from the offering would “partially repay” a principal amount outstanding under a revolving credit facility, contracted by MCO Nominee One Ltd, a subsidiary of Melco Resorts Finance, on April 29, 2020.

Any remaining balance from the new notes would be used for “general corporate purposes,” stated Tuesday’s filing.

Melco Resorts itself “will not be a guarantor of the new notes,” said the filing.

Melco Resorts operates casinos in Macau, as well as City of Dreams Manila in the Philippine capital. It also has a monopoly licence in the Republic of Cyprus, where its flagship resort is City of Dreams Mediterranean.

On Monday, Moody’s Ratings assigned a ‘Ba3’ rating to the planned U.S. dollar notes from Melco Resorts Finance, with a “stable” outlook. The ratings agency added it expects Melco Resorts’ 2024 earnings to benefit from a “strong recovery” in the Macau market.

At the same time the finance unit had announced plans for a new offering, Melco Resorts said it had clinched arrangements to extend by two years the maturity date on HKD14.85-billion worth – which it said was equivalent to US$1.92-billion – of an existing revolving credit facility.

The new maturity date will now be April 29, 2027, instead of April 29, 2025

Melco Resorts Finance’s 2023 annual report, issued on Monday via the U.S., outlined that as of December 31, its long-term net debt had decreased 11.8 percent year-on-year, to just under US$4.99 billion, from nearly US$5.66 billion in 2022.