MGM China announced overnight that it has reached agreements with its lenders to extend the maturity date and amend other terms of two separate revolving credit facilities worth almost HK$13 billion (US$1.66 billion) combined.
According to overnight filings with the Hong Kong Stock Exchange, the first relates to a revolving credit facility in the amount of HK$9.75 billion (US$1.24 billion) with became effective on 14 August 2019 with a final maturity date of 15 May 2024. Under the amended terms, the final maturity date will be extended for an additional two years to 15 May 2026, while MGM China’s leverage ratio must be no higher than 5.50:1 by 31 March 2025 and fall each quarter to no higher than 4.50:1 by 31 March 2026.
Interest will be charged at a fluctuating rate per annum based on HIBOR plus a margin in the range of 1.625% to 2.75%, which will be determined by the company’s leverage ratio.
The second instance relates to a facility entered into in May 2020 in the amount of HK$2.34 billion and also with a final maturity date of 15 May 2024. The company has since increased the drawdown amount of the facility to HK$3.12 billion.
Under the amended terms, the maturity date has again been extended by two years until 26 May 2026 while MGM has been granted an option to increase the amount of the facility up to HK$5.85 billion.
In return the permitted leverage ratio must also not exceed 5.50:1 by 31 March 2025 and fall each quarter to no higher than 4.50:1 by 31 March 2026.
Both facilities must be prepaid in full should any scenario arise that would see the shareholding MGM China’s parent, MGM Resorts International, fall below 50% of issued share capital of the company.
The amended facility agreements come after MGM China recently reported a 130% year-on-year rise in casino revenues in Q1, allowing the company to reverse a US$26 million EBITDAR loss in the March 2022 quarter with positive print of US$169 million in 1Q23.
