The Japanese company Universal Entertainment Corp., which owns the Okada Manila casino resort, has raised $800 million to pay down its current notes that mature in December 2024. This calculated action maintains the company’s continuous operations and guarantees its financial stability.
Universal Entertainment revealed plans to issue additional notes on July 26 through an international private placement in an announcement on Wednesday. These $400 million notes will maturity on August 1, 2029, with an annual interest rate of 9.875%. Furthermore, a further $400 million was obtained via a loan brokered by Okada Manila’s main promoter, Tiger Resort, Leisure and Entertainment Inc.
Universal Entertainment’s refinancing strategy considered various factors, including the repayment plans for each borrowing entity, the tax implications on interest expenses, and the diversification of lenders and repayment dates. This comprehensive approach aims to maintain financial health and ensure timely repayments.
Fitch Ratings and Financial Health
On Monday, Fitch Ratings Inc assigned a preliminary rating of ‘B-’ to Universal Entertainment’s new notes. The rating agency emphasized that the final rating would depend on receiving final documents confirming the new funds raised will fully redeem the notes maturing in December 2024.
Fitch also highlighted that Universal Entertainment’s credit profile remains constrained due to its limited operating scale, noting that “over half” of the group’s EBITDA comes from its casino resort operations in the Philippines.
Despite these constraints, Universal Entertainment’s strategic refinancing reflects a proactive approach to managing its debt and ensuring long-term financial stability. The successful issuance of new notes and securing of additional funds demonstrate the company’s commitment to maintaining its operational and financial health.
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