Photographer: Billy H.C. Kwok/Bloomberg

MGM China to issue US$500mln in senior unsecured notes

MGM China announced that it reached a purchase agreement with several financial entities for US$500 million (MOP3.9 million) senior unsecured notes the gaming operator plans to issue on June 18.

The senior unsecured notes are due in 2025 with a 5.25 per cent interest rate per annum.

The purchases include BofA Securities, Inc., ICBC (Macau) Limited, Bank of Communications Co., Ltd. Macau Branch, Bank of China Limited, Macau Branch, Barclays Capital Inc., BNP Paribas, J.P. Morgan Securities plc, SMBC Nikko Securities America, Inc., UBS AG Hong Kong Branch, Scotia Capital (USA) Inc. and Union Gaming Securities Asia Ltd.

MGM China estimates that the net proceeds from the offering of the notes will reach approximately US$493 million, after deducting the discounts of the initial purchasers and other estimated offering expenses payable by the gaming operator.

As with other gaming concessionaires, the Covid-19 pandemic had a significant impact in MGM China’s operations this year, with the group’s operating revenues and Adjusted EBITDA going down 63.3 per cent and 107.6 per cent year-on-year, respectively, in the first three months of 2020

The company intends to use the net proceeds from the offering of the notes to repay a portion of the amounts outstanding under a HK$9.75 billion revolving credit facility subscribed by MGM China in August, 2019 final maturity date on May 15, 2024, and for general corporate purposes.

MGM also entered a HK$2.34 billion second revolving credit facility on May 26, 2020 with a final maturity date on May 15, 2024.

As of May 31 of this year, MGM China had cash and cash equivalents of almost HK$5 billion, plus an available capacity of HK$5.2 billion under the mentioned revolving facilities.