A subsidiary of Studio City International Holdings Ltd, the controlling entity for the Studio City casino resort (pictured) in Macau, has announced it plans to raise an aggregate of US$1 billion via a dual-tranche offering of senior notes.
Studio City Finance LLC said in a press release on Wednesday that the offering consists of: US$500-million in aggregate principal amount, of 6.00-percent senior notes due in 2025; and US$500 million in aggregate principal amount, of 6.50-percent senior notes due in 2028.
The notes were priced at 100 percent, the firm said. The operation had first been flagged on Tuesday.
Studio City Finance added in its Wednesday release that the net proceeds from the offering would be used to redeem in full the outstanding 7.250-percent senior secured notes due in 2021 issued by one of its units. The proceeds would also be used to pay the fees and costs related to the proposed notes offering and the redemption of the existing notes, and to fund in part the capital expenditures of the remaining expansion project for Studio City.
Efforts regarding a phase two for Studio City are currently in progress, according to commentary by casino developer and operator Melco Resorts and Entertainment Ltd. The latter firm controls Studio City International Holdings and runs the gaming operations at the Studio City property. Melco Resorts is controlled by gaming entrepreneur Lawrence Ho Yau Lung.
Studio City International Holdings also had announced on Tuesday it was starting a series of private offers for its Class A ordinary shares. Upon the successful completion of the private placements, Studio City expects to “receive gross proceeds of no less than US$450 million and up to approximately US$500 million,” it stated.
The private offers could potentially lead Melco Resorts to increase its stake in the firm. It currently controls about 54.3 percent of Studio City International Holdings.
A number of casino operators and gaming equipment suppliers have in recent weeks announced fresh debt issuance exercises, to help them face the financial challenges posed by the negative impact on business from the Covid-19 pandemic.
In a Tuesday business update, Studio City Finance noted the Covid-19 pandemic had an “adverse effect” on company results in the first quarter of 2020, which had “persisted into the second quarter of 2020 and beyond”.
The Studio City property generated negative adjusted EBITDA of US$9.4 million in the first quarter of 2020, compared with positive EBITDA of US$96.4 million in the prior-year period. “The year-over-year decrease in adjusted EBITDA [at the property] was primarily a result of softer performance in all gaming segments,” according to results disclosed in May by Melco Resorts.
Jun 29, 2022The liquidity of casino group Las Vegas Sands Corp is “strong”, with over US$6.4 billion of consolidated cash and nearly US$3.5 billion of undrawn revolving credit facility capacity, said a...
Jun 29, 2022
"There is still no clarity about when border easing for Macau will occur. In the end these changes are needed to see a rebound for Macau business"
Vitaly Umansky, Louis Li and Shirley Yang
Analysts at brokerage Sanford C. Bernstein