Melco IPO a success
Melco Resorts and Entertainment (Philippines) has announced it will redeem PHP2 billion (US$38.2 million) outstanding 5 percent fixed-rate corporate secured notes. The notes were first issued in January 2014 with a maturity date of January 24, 2019.
Melco Resorts Philippines, a unit of Melco Resorts and Entertainment Ltd., runs the City of Dreams Manila in the Entertainment City casino zone.
In other Melco news, Studio City’s recent IPO could help majority owner Melco Resorts and Entertainment complete a full acquisition of the property, even though its stake fell almost 7 percent due to the IPO. Brokerage Bernstein called the move a plus for Melco and New Cotai Holdings, an arm of U.S.-based investment firms Silver Point Capital and Oaktree Capital Management which also owns a piece of Studio City, reported Inside Asian Gaming.
Studio City sold 41.3 percent of its equity during the offering and raised US$413 million. Melco’s stake dropped from 60 percent to 53.2 percent and New Cotai’s from 40 percent to 24.4 percent. Affiliates of New Cotai acquired 12.8 percent and 9.4 percent was bought by public investors.
Bernstein said the IPO “provides for New Cotai a step toward monetizing its interest in Studio City and a potential path towards a future Melco acquisition of Studio City. If Melco were to eventually buy out minority interest, the IPO and public market trading price also help set a price threshold.”
Bernstein said the IPO price of US$12.50 per share was also a positive for Melco, enabling it to hold onto its majority ownership while reducing Studio City debt.
