Melco Resorts Finance Limited, the wholly-owned subsidiary of Melco Resorts & Entertainment that operates Macau integrated resorts City of Dreams and Altira Macau, says its lenders have agreed to waive certain financial condition covenants surrounding credit facilities secured earlier this year.
The waivers relate specifically to a HK$14.85 billion (US$1.92 billion) revolving credit facility secured from a syndicate of banks on 29 April aimed at providing extra liquidity to navigate the COVID-19 pandemic.
According to details provided in Melco Resorts Finance Limited’s 3Q20 results summary, published Friday, its subsidiary MCO Nominee One Limited has received confirmation from the majority of those lenders agreeing to waive financial condition covenants contained in the facility agreement.
They include previous requirements to meet or exceed the interest cover ratio (ratio of consolidated EBITDA to consolidated net finance charges) of 2.50 to 1.00; to not exceed the senior leverage ratio (ratio of consolidated total debt to consolidated EBITDA) of 3.50 to 1.00; and to not exceed the total leverage ratio (ratio of consolidated total debt to consolidated EBITDA) of 4.50 to 1.00.
The waivers apply to test dates on 31 December 2020, 31 March 2021, 30 June 2021, 30 September 2021 and 31 December 2021.
Melco Resorts Finance said MCO Nominee One Limited has agreed to pay a customary fee to all consenting lenders in relation to gaining such consent.
The entity had in July completed a payment of HK$2.73 billion (US$352.2 million) of the principal amount outstanding under the 2020 credit facilities, utilizing a portion of proceeds from a US$500 million notes offering completed earlier that month.
Melco Resorts Finance reported a net loss of US$203.4 million in 3Q20, down from net income of US$93.0 million, on an 87.2% decline in operating revenues of US$170 million.