roceeds will finance Melco's plans to build Macau Studio City, a US$ 2.5 bn-plus gaming and entertainment resort on the developing Cotai strip, said one source.
The debt funding will feature a loan-cum-bond combo with the loan expected to be for around US$ 1.25 bn and the US dollar bond for the remainder, according to another source. The borrower is in discussions with banks for the loan financing and is seeking underwritten commitments.
Melco's last visit to the loan markets was in May 2011 when it raised US$ 1.2 bn through a dual-tranche financing comprising an US$ 800 m term loan and a US$ 400 m revolver. The term loan amortises to 50% and has a two-year grace period. The blended average life is 4.1 years.
ANZ, Bank of America Merrill Lynch, Bank of China Macau, Commerzbank and Deutsche Bank were coordinating lead arrangers and book runners on the fully underwritten facility. The deal paid top-level blended all-ins of 208-308 bp over Libor.
In May 2010, Melco raised US$ 600m through an eight-year non-call four Global bond paying a coupon of 10.5%.