Macau’s SJM Holdings has proposed to conduct an international offering of notes for the purpose of refinancing some existing indebtedness – including US$500 million in outstanding senior notes due 27 January 2026.
Pricing of the new notes had not been determined at time of publication, with SJM stating that such pricing will be determined through a book building exercise to be conducted by its Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers. The new notes will be offered only to non-US persons
In a filing, SJM said it “believes that there would be significant benefit to the Company in effecting the proposed issuance and using the net proceeds for the intended purpose as it would extend the maturity profile of the Group’s indebtedness, and enhance the Group’s financial flexibility.”
The company, via subsidiary Champion Path Holdings Limited, also launched Monday a concurrent offer to purchase for cash any and all of the outstanding 2026 Notes.
Ratings agency Fitch was quick to assign SJM’s proposed notes a rating of “B-” with a negative outlook for the company. The negative outlook, Fitch explained, reflects heightened uncertainty around SJM’s deleveraging trajectory given weak growth at its flagship Macau resort Grand Lisboa Palace (GLP) in Cotai as well as market share dilution from the closure and restructuring of satellite casinos.
EBITDA leverage is seen increasing to over 8x before gradually falling to 5x in 2027
“We believe SJM Holdings remains on a deleveraging path in the medium term, with improvement in free cash flow and a focus on debt reduction. However, uncertainty remains over the ramp-up of GLP and the impact of its satellite casino closures and restructuring,” Fitch said.
