A unit of Studio City International Holdings Ltd, promoter of the Studio City casino resort in Macau, has priced its offering of US$350-million in 7.00-percent senior secured notes due in 2027, according to a Wednesday filing. The note offering will be conducted by the group’s subsidiary Studio City Co Ltd.
The net proceeds will be used partially to fund the capital cost of the under-construction Phase 2 of Studio City, and the rest being used for general corporate purposes.
Moody’s Investors Service Inc has issued a ‘Ba3’ rating with ‘negative’ outlook to the senior secured notes to be issued by Studio City Co. The Ba3 rating is considered by Moody’s as below investment grade, with “speculative elements” that are “subject to substantial credit risk”.
On Monday, Studio City International also announced that it has entered into subscription agreements for a private placement offering of US$300 million, priced at US$0.75 per share. It announced that its existing shareholders, which hold in aggregate over 99 percent of the outstanding shares, have subscribed to the offering.
It includes a commitment from casino operator Melco Resorts and Entertainment Ltd to purchase just above 220 million shares of Studio City International, in an aggregate amount of US$165.1 million.
Standard & Poor’s Global Ratings had noted in a Monday memo that the fresh financing linked to the Studio City complex, should enable its owner to “withstand a zero-revenue scenario for at least a year”.
Studio City International said in a Monday filing in the United States that the budget for Phase 2 of the casino resort had been cut to approximately US$1.2 billion.
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”Momentum is expected to grow as mainland China recently reopened its borders, and this presents a substantial growth potential for us as historically a large portion of our clientele came from China”
Non-executive chairman of Donaco International