Content Writer: Janice Chew • Tuesday, 25/09/2025 - 22:59:59 - PM
Melco Resorts Finance Ltd, a wholly-owned subsidiary of Melco Resorts & Entertainment, has unveiled a plan to shore up its debt profile by issuing new senior notes and launching a conditional cash tender offer to redeem its 5.250% senior notes due in 2026. The tender offer aims to purchase all of the outstanding 2026 notes at US$1,000 per US$1,000 principal amount. However, this purchase is contingent: it depends on the successful issuance of new notes whose gross proceeds must cover the cost of buying back the old 2026 bonds plus any costs and fees, and also allow redemption of any remaining 2026 notes that are not tendered.
The proposed amount is substantial: Melco plans to issue around US$500 million of new notes to match the US$500 million of the existing notes due in 2026. According to CBRE Credit Research, the new notes are expected to mature after the Macau gaming concession expires (which is around 2032), helping push out Melco’s debt obligations further into the future. The refinancing is viewed by analysts as likely to be “leverage neutral,” though slightly dilutive to free cash flow due to the difference in coupon between old and new notes.
From a risk and financial-structure perspective, this move gives Melco some breathing room. Melco Resorts Finance’s 2026 notes carry a 5.25% interest rate—refinancing or replacing them with longer-dated debt (hopefully at a similar or lower rate) could help mitigate refinancing pressures in a rising interest environment. Also, by making the new notes rank equally with existing senior debt (senior obligations of the finance arm) and keeping the parent company not as guarantor, Melco is maintaining the same hierarchy of debt obligations, which may matter to credit rating agencies and investors.
Looking ahead, success depends a lot on market conditions and investor appetite. The tender offer’s deadline is September 19, 2025 (5:00 pm New York time), with settlement expected on September 24, 2025, if all conditions are met. If the new notes are well received, Melco could extend its maturity profile and ease short-term debt risk. But if investor fear yields, credit spreads, or Macau’s gaming-macro environment sour, then the refinancing could come at a premium or with tougher terms.
