In preparation for MPEL's Q4 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.




  • MPEL is looking to raise $2 billion for its Macau Studio City project.  The debt funding will feature a loan-and-bond combo with the loan expected to be for around US$1.25BN and the US dollar bond for the remainder, according to another source.  The borrower is in discussions with banks for the loan financing and is seeking underwritten commitments. 
  • Melco's last visit to the loan markets was in May 2011 when it raised US$1.2BN through a dual-tranche financing comprising of an US$800MM term loan and a US$400MM revolver (deal priced all-ins of 208-308bp over LIBOR). The term loan amortizes to 50% and has a two-year grace period. The blended average life is 4.1 years.






  • "We continue to see the expected supply outlook for both hotels and tables as supporters of a managed growth profile for Macau, providing an environment for sustainability for the overall gaming sector. However, we believe the regulated table supply outlook will benefit those operators who have exposure and are most leveraged to take advantage of the shift in the gaming epicenter to Cotai."
  • "We continue to see improvements in our key mass market metrics, including our mass table gain in core percentage at City of Dreams where we have revised our expected mass hold percentage to a range of 23% to 26%. This compares to our range in 2010 of 20% to 22%.  We believe this increase is sustainable and reflects various operational initiatives put in place over the last 12 to 18 months."
  • "Total depreciation and amortization expense is expected to be approximately $90 to $95 million, corporate expense is expected to come in at $18 million to $20 million and net interest expense is expected to be approximately $30 million."
  • "We're working closely with the Macau government. We have submitted various documents into the government. And so subject to their approval and going through the regular processes, we hope to restart construction for Studio City in the first quarter. So I think in terms of, from a design standpoint, I think we are quite advanced in the conceptual design space. So we're pretty much ready to go."
  • "What we have to look is actually at the existing liquidity and also the metric that we're building the operation. I don't see any evidence so far, seeing any correlation of the liquidity and problems that we all have heard in China at the moment. In terms of the mass, I think we still see some growth more than the visitation number in Macau and in terms of volume growth there compared to Cotai, I think Cotai will start to pick it up faster than the peninsula side, and I think that will trend for the last one-and-a-half months starting from fourth quarter."
  • [Macau Studio City Capex] "We're in the midst of budgeting for 2012, but I think we should be someplace in the $75 million to $100 million CapEx for 2012."
  • "I think the depth of the market is very, very promising in Macau and we continue to focus on one segment, which is what we are strong at, which is the premium mass and the high end premium mass set."
  • "I think in respect to a few junket operator we are looking to the productivity in a very disciplined way. In terms of ramping up, I think so because we are looking for enhancement on the facility at the moment in COD especially in the VIP Level 2 area. And also we see more enhancement of facilities on this first quarter next year as well."

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