Macau gaming bonds set frontier financing precedent

Author: Ashley Lee | Published: 11 Dec 2013
  • In October, Wynn Macau was able to price a bond with no covenant package aside from a change of control put option, underscoring investor demand for Macau gaming credits;
  • US casino developers have tapped the high-yield market for construction financing, and Asian developers have also looked to high-yield bonds;
  • High-yield bonds issued to finance casino construction typically require project-finance style covenant packages to account for construction risk;
  • Macau casino developers have issued high-yield bonds for casino construction, however they might be used by casino developers in emerging markets to finance more gaming venues. Emerging markets casino developers might also look to the lending market and might consider an initial public offering (IPO), utilising the entire right side of their balance sheet.

Casino operators in the US and Macau are...