MGM China gets to soften its loan terms
The holding managed to secure the approval of the majority of its lenders to adjust the terms of a HKD23.4 billion (US$3 billion) loan.
China.- MGM China Holding Ltd.’s loan amendment got approved by “two-thirds of its lenders to relax its financial conditions, loosening covenants on its leverage ratio,” says a report by Bloomberg Business.
The previous conditions stated a maximum total leverage of four times after the first anniversary of its new MGM Cotai casino, which is scheduled to open in the fourth quarter of this year. The casino operator asked to raise the maximum total leverage to six times “from the second quarter of 2016 until the same period in 2017,” according to Bloomberg.
The reason for such benevolent treatment is the declining revenue of casino companies in the city state of Macau, which is making it difficult for companies to meet their financial obligations. Last year, Macau’s gaming revenue dropped 34.3 percent, its lowest level since 2010 and as per December’s monthly gaming revenue, it came to MOP 18.34 billion (US$2.3 billion,) a 21.2 percent decline year-on-year.
