Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Melco International Development / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco International (200 HK)</a> gains as Lawrence Ho increases his position. Melco and 51.1%-held <a href="https://www.smartkarma.com/entities/melco-crown-entertainme-adr" target="_blank" data-smartkarma-citation="entities:810:1" rel="noopener">Melco Resorts (MLCO US)</a> are the two worst performing gaming stocks over the past year.</li>
<li>Preceding my comments on Melco are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Melco International (200 HK) gains as Lawrence Ho increases his position. Melco and 51.1%-held Melco Resorts (MLCO US) are the two worst performing gaming stocks over the past year.
Preceding my comments on Melco are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Melco Gains As Lawrence Ho Buys

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

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Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-26076'>China Vanke </a></li><li><a href='#lucror-entity-5293'>Melco Resorts and Entertainment (Philippines)</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.China Vanke Melco Resorts and Entertainment (Philippines)

Morning Views Asia: China Vanke  , Melco Resorts and Entertainment (Philippines)

Melco Resorts and Entertainment (MLCO) announced yesterday that it is planning to issue USD 500 mn in 8NC3 notes. In addition, subsidiary Studio City has initiated a tender offer to repurchase up to USD 100 mn of the STCITY 6.0 '25s. We view positively MLCO's proposed bond issuance and the maturity extension of its credit facilities, as well as Studio City's tender offer, as they demonstrate management's proactive approach in managing the company's debt maturities. The transactions will significantly reduce MLCO's refinancing risk in FY 2025, as the company would have c. USD 1.5 bn of availability under its credit facilities that can be used to help repay the USD 1.0 bn MPEL 4.875 '25s due in June 2025. Moreover, management has committed to prioritise debt reduction over dividend payments in FY 2024. We view the price talk of 7.75-7.875% as fair.

  Melco Resorts and Entertainment (MLCO) announced yesterday that it is planning to issue USD 500 mn in 8NC3 notes. In addition, subsidiary Studio City has initiated a tender offer to repurchase up to USD 100 mn of the STCITY 6.0 '25s. We view positively MLCO's proposed bond issuance and the maturity extension of its credit facilities, as well as Studio City's tender offer, as they demonstrate management's proactive approach in managing the company's debt maturities. The transactions will significantly reduce MLCO's refinancing risk in FY 2025, as the company would have c. USD 1.5 bn of availability under its credit facilities that can be used to help repay the USD 1.0 bn MPEL 4.875 '25s due in June 2025. Moreover, management has committed to prioritise debt reduction over dividend payments in FY 2024.   We view the price talk of 7.75-7.875% as fair. 

Melco Resorts - Event Flash - Proposing USD 500 Mn 8NC3 Notes Issuance - Lucror Analytics

Melco Resorts' (MLCO) results remained soft in Q4 and FY 2023. GGR from the company's Macau properties improved sequentially in Q4, but continued to underperform peers relative to the 2019 levels. Moreover, EBITDA from City of Dreams (COD) Manila was flat, while earnings from COD Mediterranean fell due to conflict in the Middle East. MLCO’s weaker earnings recovery meant that the pace of its net debt reduction in FY 2023 (-7% y-o-y) has lagged those of peers such as Sands China (-19%), MGM China (-23%) and Wynn Macau (-10%). That said, from a credit perspective, we are less concerned about the softer earnings performance of Wynn Macau and Melco Resorts (vs. for MGM China and Sands China), as we believe these companies will prioritise using FCF generation to gradually deleverage. In our opinion, the slower pace of deleveraging for Wynn Macau and Melco Resorts may delay the resumption of dividend payments, but is unlikely to affect the companies' refinancing abilities.

  Melco Resorts' (MLCO) results remained soft in Q4 and FY 2023. GGR from the company's Macau properties improved sequentially in Q4, but continued to underperform peers relative to the 2019 levels. Moreover, EBITDA from City of Dreams (COD) Manila was flat, while earnings from COD Mediterranean fell due to conflict in the Middle East.   MLCO’s weaker earnings recovery meant that the pace of its net debt reduction in FY 2023 (-7% y-o-y) has lagged those of peers such as Sands China (-19%), MGM China (-23%) and Wynn Macau (-10%). That said, from a credit perspective, we are less concerned about the softer earnings performance of Wynn Macau and Melco Resorts (vs. for MGM China and Sands China), as we believe these companies will prioritise using FCF generation to gradually deleverage. In our opinion, the slower pace of deleveraging for Wynn Macau and Melco Resorts may delay the resumption of dividend payments, but is unlikely to affect the companies' refinancing abilities. 

Melco Resorts - Earnings Flash - FY 2023 Results - Lucror Analytics

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/lippo-malls-indonesia-retail-trust' target='_blank' rel='noopener'>Lippo Malls Indonesia Retail Trust</a></li><li><a href='/entities/vedanta-resources-ltd' target='_blank' rel='noopener'>Vedanta Resources</a></li><li><a href='/entities/renew-energy-global-plc' target='_blank' rel='noopener'>ReNew Energy Global </a></li><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li><li><a href='/entities/geely-automobile-holdings-ltd' target='_blank' rel='noopener'>Geely Auto</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Lippo Malls Indonesia Retail TrustVedanta ResourcesReNew Energy Global China Jinmao HoldingsGeely Autoand more...

Hong Kong

Melco Resorts & Entertainment Limited develops, owns, and operates casinos. The Company offers casino gaming, restaurants, bars, and resorts facilities. Melco Resorts & Entertainment serves customers in Asia.

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Melco Resorts & Entertainment (MLCO US)

StubWorld: Melco Gains As Lawrence Ho Buys

While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holdco structure. If in, I'd unwind here....

David Blennerhassett

Morning Views Asia: China Vanke , Melco Resorts and Entertainment (Philippines)

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Melco Resorts - Event Flash - Proposing USD 500 Mn 8NC3 Notes Issuance - Lucror Analytics

Melco Resorts and Entertainment (MLCO) announced yesterday that it is planning to issue USD 500 mn in 8NC3 notes. In addition, subsidiary Studio...

Lucror Analytics

Melco Resorts - Earnings Flash - FY 2023 Results - Lucror Analytics

Melco Resorts' (MLCO) results remained soft in Q4 and FY 2023. GGR from the company's Macau properties improved sequentially in Q4, but continued...

Lucror Analytics

Weekly Wrap - 19 Jan 2024

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

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