Gaming | Studio City’s GGR up 146% in Oct-Nov, pursues senior notes

The aggregate gross gaming revenue (GGR) of Studio City’s casino from October to November 2020 surged by 146% when compared to the third quarter of last year, according to a report released by Studio City International Holdings Ltd (SCIHL) on January 4.
The property’s gaming receipt is gradually turning the corner during the health crisis, as the group affirmed in the filing that it expects to “achieve break-even” in adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) by reaching around 30-35% of its historical GGR run-rate.
The conglomerate attributes the promising forecast to the “mitigating measures” it implemented to weather the economic impact of the pandemic. These measures included a cost reduction scheme to minimize cash outflow of non-essential items and rationalizing the capital expenditure program with deferrals and reductions.
In addition, the memo stated that Covid-19 is expected to continue to negatively affect Macau’s GGR, when taking into account “the significant travel bans or restrictions, visa restrictions and quarantine and social distancing requirements.”
That same day, the Studio City Finance Limited, a wholly owned subsidiary of SCIHL, published another filing to propose conducting an international offering of senior notes to fund the Phase 2 development of Studio City.
According to the filing, the interest rate and other terms of the senior notes will be determined at the time of pricing for the notes offering.
It also launched a conditional cash tender offer for “any and all” of its outstanding 7.250% senior notes — which musters a principal amount of USD600 million – which will be due in February 2024.
The money will be used to partially fund “remaining projects for Studio City” and for “general corporate purposes,” the filing stated.
This latest offering of senior notes comes after the SCIHL received $500 million through a series of private offers of its shares in August 2020. This ramped up the stake of its largest shareholder Melco Resorts and Entertainment Ltd in the SCIHL from 54.1% to 54.7%.
In 2020, Melco disclosed that the construction project of Phase 2 of Studio City, hindered by the pandemic, would be unlikely to meet its previously scheduled deadline of May 31, 2022. Honey Tsang