Melco Crown’s Studio City has announced it will conduct a bond offering to redeem and refinance its existing US$1.4 billion credit facility.
The bond structure will consist of senior secured notes due 2019, and senior secured notes due 2021.
“From our initial read of the press release, the two new notes will be pari passu with each other and senior to the existing US$825mm 8.5 percent notes due 2020,” said Bernstein in a note following the announcement.
According to the brokerage, the refinancing is likely to 1) push out maturities as the existing credit facility was due to mature in January 2018, and 2) to revise financial covenants which likely would have been breached for the Q1 2017 covenant tests.
Another key indication from the refinancing is that the “buyout of the 40 percent minority investor in Studio City will not occur in the near term,” noted Bernstein.