Inside Asian Gaming

Oct 2007 | INSIDE ASIAN GAMING 7 One of the short-term challenges is that Wall Street—the capital market that un- derstands the integrated resort model best from previous experience in Las Vegas—ap- pears to be pulling in its horns a little since the global credit squeeze began. In contrast, the Asian capital markets still have plenty of liquidity. China’s commercial banks lent out 2.5 trillion yuan (US$329 billion) in the first half of this year, according to China’s central bank. Asian capital markets though have the least experience of the gaming industry’s IR concept and tend to go overweight on the risk side regarding issues such as the internal politics of China and the lack of a pre-exist- ing IR market in Asia. It is still common to hear Asian bankers joking privately that Chinese people would rather stay up all night gambling than waste valuable time at the tables by booking in to a five-star hotel. Unequal perceptions With this background, the onus is on op- erators to sell their projects to the markets as effectively as possible. Macau’s operators are born more or less equal in terms of their licensing and regulation, but some are more equal than others when it comes to public perception of the fundamentals of their business and the suitability of their assets for leveraging. When Melco PBL Entertainment (MPEL) tried to raise US$2.75 billion project finance on the US capital markets recently, it came up US$1 billion shy of its target. It soon man- aged to sign a US$1.75 billion syndicated Ciy of Dreams