Melco Resorts & Entertainment has announced that its subsidiary, MCO Nominee One Ltd, has entered into a senior facilities agreement for up to HK$14.85 billion (US$1.92 billion) with a syndicate of banks.
The senior facilities agreement, coming on the same day as Melco completed the sale of its entire 9.99% stake in Australia’s Crown Resorts for AU$550 million (US$358 million), is primarily intended to refinance HK$13.65 billion (US$1.75 billion credit facilities entered into in June 2015 between Melco Resorts (Macau) Limited and Deutsche Bank AG among others. It will also be used for “general corporate and working capital purposes” of the company and its subsidiaries, Melco said, as it continues to battle the impact of the global COVID-19 pandemic.
The new facilities agreement is for a term of five years and provides an option for MCO Nominee One Limited to incur further indebtedness under incremental facilities up to HK$7.75 billion (US$1 billion). Melco said it intends to withdraw its first loan under the facility “on or around” 6 May 2020.
Assessing the company’s liquidity position in the wake of a busy Wednesday for Melco, analysts at brokerage Bernstein said the operator “has now been further strengthened by the sale of its 10% stake in Crown Resorts and its new expanded credit facility.
“The strong liquidity position gives Melco both safety in term of the current cash burn, and also probably more importantly provides Melco with liquidity for opportunistic investment opportunities that may arise.”