Studio City Finance Limited announced that its international offering of 5% senior notes due 2029 consists of $350 million aggregate principal amount of additional notes, priced at 102% of the principal amount, “plus accrued interest from 14 January, 2021 to, but not including, the issue date of the additional note”.
According to the statement, the company intends to use net proceeds from the offering to partially fund the capital expenditures of the remaining project for Studio City and for general corporate purposes. Studio City needs to finish the development of the second phase of the venue after it was granted a seven-month extension by the Macau government, and now has to complete the development by 27 December, 2022.
The notes are considered as senior obligations and rank equally with other senior indebtedness.
The additional notes will follow the same conditions as the 5% original notes issued in January worth $750m in aggregate principal amount.
The original notes are also due in 2029.
GGR Asia reported that Moody’s Investors Service thinks the offering of notes would boost the company’s liquidity and give them financial support for the next year. “The debt increase is within our expectation because we had expected Studio City Finance to fund a significant part of its large-scale phase-two capital spending using debt,” commented Sean Hwang, assistant VP at Moody’s. “The tap issuance will boost Studio City Finance’s good liquidity, giving it a sufficient cash balance to cover its planned capital spending over the next 12 months.”
Studio City Finance currently holds a B1 rating.