MGM's Macau Venture With Pansy Ho Receives $950 Million of Five-Year Loans

MGM Grand Paradise SA, the Macau venture between Pansy Ho and MGM Resorts International, said it agreed to a $950 million loan to refinance existing debt and provide added liquidity.

The loans due 2015 comprise of HK$4.29 billion ($553 million) of term loans and a HK$3.12 billion revolving facility, according to a statement distributed by PR Newswire today. The Macau venture had planned to borrow $850 million of five-year loans, a person familiar with the matter said July 21.

MGM Grand Paradise has the smallest market share of casinos in Macau, according to estimates by Deutsche Bank AG and CLSA Ltd. Casino gambling revenue in Macau, the world’s biggest gambling hub, surged 67 percent in the first six months of the year to 86 billion patacas ($10.7 billion), according to data on the city’s Gaming Inspection and Coordination Bureau website.

“MGM was losing money in the beginning and has been the worst performer among other casino players in Macau,” Francis Lun, general manager at Fulbright Securities Ltd., said in a telephone interview today. “As the pie is becoming larger, it’s improving now.”

MGM Grand Paradise has the equivalent of $137.5 million of loans maturing in 2013, according to data compiled by Bloomberg. Bank of America Corp. coordinated the new loan arrangement, which attracted some 15 lenders, according to the statement.

“The new credit facility demonstrates the support of both the local banking community and the international financial market,” Pansy Ho, managing director of MGM Grand Paradise, said in the statement. “This support enabled us to upsize the credit facility and provides us with a strong long-term capital structure.”

SJM Holdings Ltd., the casino operator controlled by billionaire Stanley Ho, had 30 percent of Macau’s market in June, followed by Sands China Ltd. with 22 percent, Deutsche Bank analyst Karen Tang estimated in a note to clients last month. Wynn Macau Ltd. had 17 percent, Melco Crown Entertainment Ltd. 13 percent and Galaxy Entertainment Group Ltd. 10 percent, according to Tang.

Pansy Ho is Stanley Ho’s daughter.

To contact the reporters on this story: Shelley Smith in Hong Kong at ssmith118@bloomberg.net Wendy Leung in Hong Kong at wleung12@bloomberg.net

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