alaxy will begin marketing the bonds to investors immediately, Robert Drake, chief financial officer, said in a phone interview today. It’s hired Bank of America, BOC International, HSBC Holdings and UBS AG to manage the sale, the casino operator said in a statement today.
“This is opportunistic financing,” Drake said. “There’s a strong demand for renminbi out there and this is just another example of how we use opportunities to increase our financial flexibility and strengthen our balance sheet.” The yuan is a denomination of the renminbi.
Galaxy, which is building a casino resort in Macau at an estimated cost of us$ 1.9 billion, said it will use the proceeds from the sale for its non-gambling business and for general corporate purposes. Casino revenue in Macau, the world’s biggest gambling hub, has grown 57 % this year through November to us$ 22 billion.
“It’s good for them to have a deal because they have financial needs” including a bond that is due next year, said Gabriel Chan, a Hong Kong-based equity analyst at Credit Suisse Group AG. The funds may also be used as the casino operator opens its us$ 1.9 billion project in Macau next year, he said.
The company will meet bond investors in Hong Kong and Singapore from December 7, according to a person familiar with the matter, who asked not to be identified because the details are private.
Galaxy, whose market value has surged 158 % this year, owes some us$ 165 million of zero coupon convertible bonds which are due December 2011, according to data compiled by Bloomberg. The company bought back us$ 75 million last year of the us$ 240 million issued, Bloomberg data show.