CASINO

Studio City Finance announces pricing for new notes

TAGs: Macau, melco international development, Studio City, Studio City Finance Limited

Studio City Finance Limited, subsidiary of New York-listed Studio City International Holdings Limited, announced the pricing for its international offering of senior notes due in 2024.

Studio City Finance announces pricing for new notesIn a press release, Studio City Finance said that the offering will consist of $600 million in aggregate principal, for 7.250% senior notes due 2024 and priced at 100%.

Net proceeds of the offering will fund a conditional cash tender offer announced by the company last week, where Studio City Finance plans to purchase all of its outstanding 8.500% senior notes due 2020. The tender offer is set to expire on February 4, at 5 p.m. New York time, with the settlement of transactions by February 11.

According to the terms of the tender offer, Studio City Finance will be paying $1,003.50 for each $1,000 principal amount of the 2020 notes, with a minimum denomination of $250,000 and integral multiples of $1,000 over that.

Any remaining proceeds from the financing of the tender offer are to be used “on general corporate purposes including but not limited to financing of working capital and repayment of certain other indebtedness,” the Studio City statement read.

It was proposed for all the new notes to be guaranteed by Studio City’s “existing restricted subsidiaries on a senior basis.”

Studio City was first listed on the New York Stock Exchange (NYSE) last October, with the issuance of 28.75 million American Depositary Shares, and $359.4 million raised for the company. The total amount increased to $406.7 million the following month, upon the initial public offering’s (IPO’s) underwriters’ exercising of an over-allotment option where an additional 4.31 million shares were sold.

The company operates the Studio City casino resort in Macau, and is majority-owned by MCE Cotai Investments Limited, which in turn is owned by Melco Resorts & Entertainment.

Parent company Melco International Development Limited announced two weeks ago that it was going to stop VIP rolling chip operations in the Studio City casino. Earlier, CEO Lawrence Ho had said that VIP was on the decline quicker than expected, as reflected in a 91.7% fall in net income for Melco Resorts in the third quarter last year. Ho had said that there was “no assurance” of continuing VIP operations for Studio City “beyond November 2019.”

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