Studio City Finance Limited, the wholly-owned subsidiary of Studio City International Holdings Limited that operates Macau integrated resort Studio City, has proposed a senior notes offering to help fund the property’s Phase 2 development.
According to a Monday announcement, the notes offering, which is yet to be priced, would also be followed by a cash tender offer for any and all of its outstanding 7.250% senior notes due 2024. The consideration for each US$1,000 principal amount of the 2024 Notes would be US$1,039.20, Studio City Finance said, with the company to redeem any notes that remain outstanding following the completion of its conditional tender offer.
On top of funding the tender offer, completion of Studio City’s notes offering would be used to “partially fund the capital expenditures of the remaining project for Studio City and for general corporate purposes,” the company said.
It follows a US$500 million private placement of shares in August that saw its majority shareholder, Melco Resorts & Entertainment, boost its stake to 54.7%.
Studio City recently revealed that its Phase 2 development, set to include two hotel towers, a Cineplex, one of the world’s largest indoor water parks and additional gaming space, was unlikely to be completed by the May 2022 deadline under the terms of its land concession with the Macau SAR Government. The company has previously had its deadline extended by three years from 24 July 2019.
Monday’s announcement also saw Studio City provide a business update in which it cited a 146% increase in gross gaming revenues in October and November 2020 compared with 3Q20, when GGR totaled just US$23.4 million. The numbers suggest combined monthly GGR of around US$38.4 million through October and November, compared with GGR of US$375.6 million in the fourth quarter of 2019.
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