Hong Kong-listed NagaCorp, operator of Cambodian integrated resort NagaWorld, will repurchase US$69.5 million of its 7.95% senior notes due 2024 following completion of a recently announced tender offer.
The US$69.5 million in notes tendered by holders fell well short of the maximum US$120 million NagaCorp had stated it was willing to repurchase, leaving US$472.2 million still outstanding at the completion of the offer.
The final clearing price was US$915 with settlement expected to take place on 17 November.
NagaCorp had last week described the purpose of its offer as being “to retire a portion of the outstanding 2024 Notes prior to maturity, and to enable the Offeror to manage its overall funding level and to reduce its gross debt and interest costs, while maintaining a prudent approach to liquidity.”
Moody’s Investors Service subsequently expressed its view that NagaCorp’s repurchase of some outstanding notes was unlikely to help it avoid a default when the remaining notes fall due given that well over US$400 million would remain outstanding.
Moody’s cited funding concerns for NagaCorp in relation to the upcoming redemption with the group’s COVID-19 recovery slower than might have been hoped on heightened regulatory scrutiny and China’s junket crackdown.
“NagaCorp’s operating performance is recovering following pandemic-related disruptions last year. However, we expect EBITDA in 2022 and 2023 to remain well below that of 2019, at 38% and 52%, respectively,” Moody’s wrote.
“Consequently, we expect the company is likely to require external financing to repay its outstanding notes. However, its ability to raise external financing is difficult because of the tight funding conditions prevailing in the current economic environment.
“At the same time, NagaCorp has limited sources of liquidity because of its lack of bank facilities and divestible noncore assets.”