Inside Asian Gaming

27 notes due in 2012. Deutsche Bank estimates that if half of all the bondholders accept the offer, it will save Galaxy HK$128 million per year in interest charges. “If 50% of the bondholders accept the offer, we estimate the annual cash interest savings to be HK$128 million, and there would be a one-time non-cash gain of HK$644 million in 2009,” says DB analyst Karen Tang Ms Tang and others say buying back Galaxy’s bonds—even on favourable terms amounting to nearly half the price that investors originally paid—will drain the company of cash in the short term, without the prospect of a quick regeneration of liquidity now that the Cotai IR has been delayed. Back to market “If Galaxy is successful in repurchasing a significant amount of its outstanding debt, the reduced cash position further reinforces our view that Galaxy will need to go back to the market to raise new financing to close the funding shortfall,” says Ms Tang in her report on the economic outlook for Macau in 2009. “Givenprevailingmarketconditions, it in unlikely that the company will successfully raise the required funds, in our view. “Hence, we continue to attribute zero value to the GalaxyWorld Resort Galaxy—fundingneeds Source: Deutsche Bank StarWorld got positive reviews from the public but will that be enough to weather the rough conditions widely expected in 2009?