Japanese conglomerate Universal Entertainment Corp, the parent of the Okada Manila casino resort in the Philippine capital Manila, says it has raised a total of US$800 million in funds to redeem its existing notes with a principal amount of US$760 million, maturing in December 2024.
The parent company said in a Wednesday announcement that it would issue new notes on July 26 – via an overseas private placement – in the amount of US$400 million, with an interest rate of 9.875 percent per annum. The new notes will mature on August 1, 2029.
A separate US$400 million were secured via a loan arranged by Universal Entertainment’s Tiger Resort, Leisure and Entertainment Inc, the direct promoter of Okada Manila.
Universal Entertainment said the refinancing took into consideration “the adequacy of the repayment plan for each borrowing entity’s ongoing business, the tax effect on the company’s interest expense, and the diversification of lenders and repayment dates”.
On Monday, Fitch Ratings Inc said it had assigned Universal Entertainment’s proposed new notes an expected rating of ‘B-’.
“The final rating is contingent upon the receipt of final documents conforming to the information already received, and verification that the total amount of new funds raised is sufficient to redeem the notes maturing in December 2024 in full,” stated the rating agency at the time.
Fitch noted in its Monday comments that Universal Entertainment’s credit profile remained “constrained by its limited operating scale”, as “over half” of the group’ earnings before interest, taxation, depreciation and amortisation (EBITDA) derived from its casino resort operation in the Philippines.
