GGRAsia – SJM to raise US$198mln via HKD, MOP notes listed in Macau

SJM to raise US$198mln via HKD, MOP notes listed in Macau

May 06, 2021 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator SJM Holdings Ltd announced on Thursday that it would raise the equivalent of about US$198.4 million via notes denominated respectively in Hong Kong dollars and Macau’s own currency, the pataca (MOP).

The notes will be listed on Macau’s fledgling bond market, the Chongwa (Macao) Financial Asset Exchange Co Ltd, which is also known locally as MOX. According to information on the exchange’s website regarding entities that have used its services, it is the first time any of Macau’s six casino licensees have listed financial instruments on the local exchange.

The exercise involves a gross amount of HKD1.25 billion (US$160.9 million) in 3.9-percent senior notes due in May 2026, and MOP300 million (US$37.5 million) in 3.9-percent senior notes, also due in May 2026. SJM Holdings gave the information in a filing to the Hong Kong Stock Exchange.

Net proceeds are estimated at HKD1.24 billion and MOP298 million respectively.

Most of the initial purchasers of SJM Holdings’ senior notes are Macau-based banks, according to the Thursday filing.

They are: Industrial and Commercial Bank of China (Macau) Ltd; Bank of China Ltd, Macau Branch; BNP Paribas; Banco Nacional Ultramarino, SA; Bank of Communications Co Ltd Macau Branch; China Construction Bank Corp Macau Branch and the Bank of East Asia, Ltd.

SJM Holdings had stated in a previous filing that it planned to use “approximately 90 percent” of the net proceeds to “refinance its syndicated credit facilities”, namely secured bank loans to support its yet-to-be launched Grand Lisboa Palace project in Cotai. The balance of the net proceeds would go for “general corporate purposes”, the casino operator had noted.

SJM Holdings has said it plans to open a first phase of its HKD39-billion new Cotai gaming resort, Grand Lisboa Palace, before the end of June.

“The board believes that there would be significant benefit to the company in effecting the proposed issuance and using the net proceeds for the intended purpose as it would extend the maturity profile of the group’s indebtedness and reduce the group’s secured indebtedness,” SJM Holdings remarked in its Thursday filing.

The casino operator also noted in its Thursday filing that it had received an approval letter from MOX for the issuance and listing of the senior notes.

MOX – founded by Chinese state-owned firm Namkwong (Group) Co Ltd in Macau in 2018 – is a financial institution specialising in bond services in the city.

Macau – encouraged by China’s central government – has pledged to diversify its economy beyond tourism and casino gambling, including the creation of a market for financial services.

Ambrose So Shu Fai, vice-chairman and chief executive of SJM Holdings, was quoted on Thursday by Hong Kong Chinese-language media outlet Ming Pao that the firm might tap into Macau’s bond issuance channel again in future, “to support the local bond market”.