In a strategic move aimed at debt management, Melco Resorts & Entertainment, a prominent Macau concessionaire, has unveiled a comprehensive plan featuring refinancing initiatives and extension of credit facilities. These measures highlight the company’s commitment to reducing its substantial debt load post-COVID-19 pandemic challenges.
Refinancing Measures
Melco Resorts & Entertainment, through its subsidiaries, has embarked on a series of refinancing maneuvers. This includes a Senior Notes offering by Melco Resorts Finance, which operates City of Dreams Macau, Altira Macau, and Mocha Clubs. The proceeds from this offering will be used to partially repay the principal under a significant revolving credit facility secured in April 2020. The refinancing aims to optimize the company’s debt structure while fortifying its financial position.
Senior Notes Offering
One of the pivotal actions undertaken by Melco Resorts is a Senior Notes offering by its subsidiary, Melco Resorts Finance. This offering is designed to address outstanding debt obligations and support general corporate needs. The exact pricing and terms of the offering are yet to be disclosed.
Debt Repayment Focus
During its 4Q23 earnings call, Melco Resorts & Entertainment emphasized its commitment to debt reduction. The company successfully retired nearly US$1 billion in debt in 2023 alone, signaling a dedicated effort to deleverage amidst the lingering effects of the COVID-19 crisis.
Studio City’s Tender Offer
Studio City Finance Ltd, a subsidiary of Studio City International Holdings, in which Melco holds a controlling interest, has announced a tender offer for up to US$100 million of its 6.000% Senior Notes due 2025. This strategic move underscores Studio City’s proactive approach to managing its financial liabilities.
Extension of Credit Facility Maturity
Melco Resorts & Entertainment has also secured an extension of the maturity date for its revolving credit facility. The facility, provided by Bank of China Limited, Macau Branch, now extends its maturity from April 2025 to April 2027. This extension provides Melco with greater flexibility in managing its debt obligations over a more extended period.
Financial Resilience Post-Pandemic
The refinancing initiatives come in the wake of Melco’s sustained efforts to fortify its financial position post the COVID-19 pandemic. The company has demonstrated resilience by significantly reducing its debt burden, aligning with its long-term financial objectives.
Melco Resorts & Entertainment’s refinancing strategy underscores a proactive approach to debt management and financial resilience. The Senior Notes offering and credit facility extension reflect the company’s commitment to optimizing its capital structure while navigating the evolving landscape of the gaming and hospitality industry in Macau. These measures are pivotal in reinforcing Melco’s financial foundation and paving the way for sustained growth and stability in the future.