Fitch Corp. has earmarked Universal Entertainment Inc’s proposed senior U.S. dollar bond as a “B-” rating due in 2029.
The Japanese conglomerate, the parent company of the Okada Manila Casino Resort (pictured) in Manila, the capital of the Philippines, said last week that it will issue new notes with a principal of $760 million to raise funds for the early repayment of existing notes. The existing notes are expected to mature in December 2024.
As part of its refinancing efforts, Universal Entertainment said the direct founder of Okada Manila, Tiger Resorts, Leisure and Entertainment Inc., arranged a $400 million loan from the Bank of China.
The start date of borrowing is set for August 1, and the amortization schedule ends for seven years from the date of borrowing.
In a note, Fitch observed that proceeds from Universal Entertainment’s new notes, along with simultaneous bank loans to be raised by its Philippine operating subsidiary, “will be primarily used to refinance Universal Entertainment’s existing notes due in December 2024.
“The final rating will depend on the receipt of a final document consistent with the information already received, and the verification that the total amount of new financing is sufficient to repay the bonds due in December 2024 in full,” it added
In May, Fitch placed Universal Entertainment on a “credit rating” due to a $760 million U.S. bill maturing in December.
“While the company is in an advanced stage of executing its refinancing plan, there is no legally binding commitment to refinancing. Fitch will view the rating negatively and confirm the rating at its current level once the refinancing plan is completed, subject to delivered terms,” the rating agency said.
Fitch noted Universal Entertainment’s credit profile is “still constrained by the limited size of its operations” as “more than half” of the group’s earnings before interest, taxation, depreciation and amortization come from its casino resort operations in the Philippines.
The agency predicted Universal Entertainment’s revenue growth “will begin to flatten in 2024 and rise from 2025.”
“However, we have downgraded our consolidated resort (IR) revenue outlook for the Philippines, although we believe the IR outlook remains positive, driven by sound economic growth and continued recovery in the Philippines,” Fitch added.
BY: 프라그마틱 슬롯 사이트