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Studio City to offer senior notes to fund Phase 2

Studio City Finance Limited, a subsidiary of Hong Kong-based Studio City International Holdings Ltd that operates Studio City, stated the casino’s gross gaming revenues (GGR) for October and November increased by approximately 146% compared to the entire Q3 2020. 

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As a result, the company announced it will offer senior notes in order to fund the Phase 2 development of Studio City. The exact sum is yet to be announced, but the company initiated a cash tender offer for any and all of its outstanding $600m senior unsecured notes that are due February 2024. 

Studio City Finance said the funding will be used on the remaining project for Studio City and general corporate purposes. This offering of senior notes follows $500m the company received from a series of private offers of its shares back in August. 

According to reports, the company was satisfied with its GGR results and expects to achieve break-even in adjusted EBITDA by reaching approximately 30-35% of historical GGR, but remains critical of the state of Macau’s casino industry. Among the reasons that might impact the GGR were travel bans, visa restrictions and social distancing requirements. 

The company stated it has “taken various mitigating measures to manage through the Covid-19 outbreak challenges, such as implementing a cost reduction programme to minimise cash outflow of non-essential items, and rationalising our capital expenditure programme with deferrals and reductions, which benefit our balance sheet.” 


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