Macao gaming IPOs

from the International Herald Tribune (1/20):

Macao companies are likely to increasingly use IPOs
By Tony Munroe
Reuters
Thursday, January 10, 2008

"HONG KONG: A $1 billion initial public offering planned by the tycoon Stanley Ho's Macao flagship company is giving investors a rare chance to bet on a casino boom that has been financed mostly by loans, but more raising of capital on public markets is in the cards.

Given the billions required to finance a planned construction spree and the change in financing needs as a gambling sector that has surpassed the Las Vegas Strip matures, operators are expected to step up the issuance of debt and equity, bankers said." ...

"Ho's company, Sociedade de Jogos de Macau, the former monopoly operator whose market share is shrinking after the entry of the U.S. heavyweights Las Vegas Sands and Wynn Resorts, plans to build up its war chest with a long-expected initial public offering set for Feb. 1.

Wynn is building a second resort, Wynn Diamond Suites, and last June doubled the size of a loan facility to $1.55 billion to finance expansion of its existing resort and pay for the new one.

Sociedade de Jogos de Macau, or SJM, would join a handful of listed Macao casino companies that includes Galaxy Entertainment Group and Melco PBL Entertainment, a venture between Melco International Development, which is run by Ho's eldest son, Lawrence, and Publishing & Broadcasting of Australia.

Other projects being built include Melco PBL's City of Dreams, the GalaxyWorld Resort, and Macao Studio City, which is backed by ESun Holdings of Hong Kong." ...

"Citigroup has been among the most active financiers of the Macao boom. It helped arrange two syndicated loans worth a combined $5.8 billion for Sands' giant Venetian Macao casino as well as underwrote Melco PBL's $1.3 billion IPO and contributed to the $1.75 billion loan the company raised in September.

The Melco PBL loan showed that even Macao is not immune to the perils of global credit markets. The company had hoped to raise $2.75 billion but cut the deal's size and raised the interest rate by 50 basis points.

The volume of syndicated lending from Macao more than doubled last year to $9 billion from six deals, according to Dealogic, but equity volumes from the former Portuguese enclave were halved from a year earlier to just $658 million.

Bond issuance from Macao has also been scarce, with Galaxy's $600 million offer in 2005 the only global public markets issue since Ho's decades-old gambling monopoly lapsed in 2002." ...

"Macao has also attracted the attention of private equity. In October, the British buyout firm Permira paid $838 million for 20 percent of Galaxy, which is building in Macao what will be the second-largest casino in the world." ...

for the complete story see:
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisp
layFullDocument&orgId=616&topicId=12552&docId=l:727119599&s
tart=5&nid=3457