Melco Resorts Finance Limited, a wholly owned subsidiary of Melco Resorts & Entertainment, has priced an international offering of $500 million in senior notes due 2033, carrying a coupon of 6.5 percent.
Proceeds will primarily fund a conditional cash tender offer, launched on September 15th, for any and all validly tendered 5.25 percent senior notes maturing in 2026. Remaining funds may be used to redeem outstanding 2026 notes, cover fees and expenses tied to the transactions, or for general corporate purposes.
The company stated that the new notes will rank equally with Melco Resorts Finance’s existing and future senior indebtedness. Melco Resorts & Entertainment itself will not guarantee the obligations.
Analysts view the issuance as part of the group’s ongoing debt management. According to CBRE Credit Research, Melco is offering $500 million of unsecured notes to refinance the 2026 bonds. The firm noted the new maturity extends beyond the expiration of Macau’s current gaming concessions in December 2032, though the market has previously tested this risk successfully.
CBRE expects the deal to be leverage-neutral but slightly dilutive to free cash flow, given the lower coupon being refinanced. The broker highlighted that Melco maintains a well-staggered maturity profile, with its next major maturity not until 2027 after this transaction.
As of now, $1.56 billion remains outstanding under Melco’s revolving credit facility, following repayment of a $1 billion bond earlier this year. Any upsize in the new issuance would likely go toward reducing revolver debt and enhancing liquidity.
Macau’s debt market has performed strongly in recent months, supported by better-than-expected gross gaming revenue (GGR). However, CBRE has shifted Melco and Studio City bonds to “Market Perform” from “Outperform,” citing relative value after a strong year-to-date rally.
