Studio City Finance Ltd proposed on Tuesday to conduct an international offering of senior notes, with proceeds to be used for a cash tender offer for the firm’s outstanding notes due in 2020. Studio City Finance is a wholly-owned subsidiary of Studio City International Holdings Ltd, the latter being the controlling entity of the Studio City casino resort (pictured) in Macau’s Cotai district.
The news was given by Studio City International Holdings’ majority owner, Melco Resorts and Entertainment Ltd, in a filing.
The new notes will be ranked equally with all of Studio City Finance’s existing and future senior indebtedness, according to Tuesday’s filing. The interest rate and other terms of the new notes will be determined at a later date, said the firm.
Studio City Finance also announced that it has initiated a conditional cash tender offer for any and all of its outstanding 8.500-percent senior notes due 2020.
The consideration for each US$1,000 principal amount of existing notes will be US$1,003.50, said the filing. The tender offer will expire on February 4, 2019, unless extended or terminated by Studio City Finance, it added.
Studio City Finance has engaged Deutsche Bank AG, Singapore Branch to act as the sole dealer manager for the tender offer.
The net proceeds from the new-notes offer will be used to fund the cash tender offer; redeem in full any existing notes which remain outstanding following the tender offer; and pay all fees and costs related to the proposed notes offering and the cash tender offer, said Studio City Finance.
Any remaining amount will be used for general corporate purposes, “including but not limited to financing of working capital and repayment of certain other indebtedness,” said the firm.
Studio City Finance said however that the cash tender offer was conditional upon the receipt of net proceeds “of one or more debt financing transactions”, together with cash on hand, being sufficient to fund the tender offer and the redemption of any existing notes.
The Studio City casino resort started operations in October 2015. The property will end “VIP rolling chip operations” with effect from January 2020, its main promoter, Melco Resorts, said in a filing last week. The company did not specify reasons for the decision.
Studio City International Holdings announced late last year the results of its initial public offering, with part of the net proceeds to be used for the repayment of existing indebtedness of one of its subsidiaries.
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