Melco Resorts Finance Ltd., a subsidiary of casino operator Melco Resorts and Entertainment Ltd. (MRE), borrowed money from another MRE subsidiary—Melco Resorts (Macau) Ltd.—in 2015 to help finance some of its operations. It now wants to pay down the outstanding debt and has announced that it will soon be offering senior notes that it hopes will give the company an injection of as much as $600 million in cash.
According to a press release from the company, it has finished pricing its international offering of the notes, which have an interest rate of 5.625% and will become due in 2027, and which are priced at 100%. The money it earns from the offering will be used to pay a percentage of the outstanding principal of the revolving credit line it was given by Melco Resorts (Macau).
The press release explains, “The New Notes are being offered and sold in the United States to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the ‘Securities Act’), and outside of the United States in reliance on Regulation S under the Securities Act. The New Notes will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state laws. Melco Resorts Finance does not intend to register any portion of the offering of the proposed New Notes in the United States.”
MRE’s Macau arm oversees the company’s sub-concession for casino operations in Macau and the parent company has been on a mission to expand its investments the past few months. It is ready to pay $1.2 billion to pick up an almost 20% stake in Crown Resorts, Ltd. out of Australia and is also expected to acquire all shares of its parent company, Melco International, in the City of Dreams Mediterranean project under construction on the island nation of Cyprus. Melco International is part of the ICR Cyprus entity developing the casino, and MRE is going to spend around $375 million to purchase 55.5 million ordinary shares to buy out Melco International.