Genting Int'l gets $4.2b loan for Sentosa resort
Fiona Chan, Straits Times 12 Feb 08;
GENTING International has secured a massive $4.19 billion in syndicated funding that will pay for about two-thirds of the integrated resort it is building in Sentosa.
The funding is a record for Genting and one of the largest syndicated credit deals in Singapore banking history. It comprises $4 billion in loans and a $192.5 million banker's guarantee facility, Genting said yesterday.
The company is the sponsor for the funding for Resorts World at Sentosa. Five banks are involved as arrangers and underwriters: DBS Bank, OCBC Bank, HSBC, Royal Bank of Scotland and Sumitomo Mitsui Banking Corporation.
The credit facilities were obtained on the eve of Chinese New Year at around 6pm, but much of the work on getting the loan started around November last year, Genting said.
The Singapore-listed company, a unit of Malaysian casino operator Genting Bhd, added that the process was 'relatively smooth', given the group's long-standing relationships with the banks.
This is despite the global credit crunch and volatile stock markets that have resulted from the United States subprime mortgage meltdown.
But 'notwithstanding the current market conditions', DBS said it expects the financing to be completed 'very successfully and in good time'.
This is due to Genting's 'impeccable standing', coupled with the 'iconic nature of this project', said DBS managing director and head of syndicated finance Peter Chan.
Genting was reported in October to be seeking a loan of $3.2 billion. But higher building expenses have pushed up its original budget for the casino by about $800 million to nearly $6 billion now.
Its $4.19 billion funding is slightly less than the $5 billion that Las Vegas Sands borrowed to build Singapore's other casino in the Marina Bay area.
That loan, arranged by eight banks including Goldman Sachs and Singapore's three banks, is said to be the largest private Singapore dollar-denominated financing ever completed.
Banks bet on IR developer with $4b loan
Arthur Sim, Business Times 12 Feb 08;
THE credit markets may have become more risk averse lately, but banks still appear bullish on the Resorts World at Sentosa, home to one of Singapore's two planned integrated resorts (IRs).
In a statement released yesterday, Resorts World at Sentosa Pte Ltd (RWS), a subsidiary of Genting International, announced that it had secured $4 billion credit facilities for its IR development.
Five local and international banks - DBS Bank, Oversea-Chinese Banking Corporation (OCBC), Hongkong and Shanghai Banking Corporation (HSBC), Royal Bank of Scotland and Sumitomo Mitsui Banking Corporation - will underwrite, bookrun and arrange the syndication of the loan, which has a tenure that extends to end-2015.
The credit facilities will fund two-thirds of the $6 billion IR at Sentosa, with the remaining to be funded through the equity raised from Genting International's rights issue last year.
RWS chief executive Tan Hee Teck said: 'Amid the turmoil in the global credit markets, they have given us a resounding vote of confidence.'
That RWS's gaming component could be a key factor in instilling this sense of confidence among the banks is perhaps not so surprising if one considers the latest gaming revenue figures coming out of Macau.
Citigroup analyst Anil Daswani believes that January 2008 could prove to be a record month for Macau with gross gaming revenue projected to be around 11 billion Macau patacas (S$1.94 billion).
Gross gaming revenue averaged only 6.77 billion patacas per month last year and according to Citi's estimates, the highest monthly revenue so far was 8.6 billion patacas set in October 2007.
In a Citi report, Mr Daswani said: 'The continuing strong growth in Macau gaming revenues should be immune to the possible recession in the United States, in our view. History also suggests that the gaming industry in fact outperformed the market during recessionary periods in the last decade.'
RWS's own estimates have put the number of expected visitors by 2010 at 15 million. These people could, of course, also be visiting RWS's other attractions, including the Universal Studios theme park.
Peter Chan, managing director and head of syndicated finance at DBS, added: 'Notwithstanding the current market conditions, we believe that based on the impeccable standing of the sponsor, coupled with the iconic nature of this project, as well the strong team of arrangers put in place, we should see this financing being completed very successfully and in good time.'
Genting's gamble
Casino developer borrows $4.2 b to fund building of IR
Today Online 12 Feb 08;
Genting International, a unit of Asia's biggest gaming operator by market value, borrowed as much as $4.2 billion to fund the building of its casino resort in Singapore, more than double its outstanding debt.
The unit of Kuala Lumpur-based Genting Bhd hired DBS Group Holdings, Oversea- Chinese Banking Corporation, Sumitomo Mitsui Banking Corporation, HSBC Holdings and the Royal Bank of Scotland to arrange the borrowing, it said in a statement.
"It is a big gamble," said Mr Lim Kok Boon, chief investment officer at Fortis Private Banking, which manages US$9.5 billion ($13.5 billion) in assets. "It is hard to tell how it is going to pan out for them, but clearly the casino project cannot fail as Genting International and the Singapore banks will be badly implicated."
The company's funding will help it to compete with the Las Vegas Sands as both race to open the first casino resort here in about two years. The two gaming developments will have Singapore's casino market for at least 10 years before the government opens up the industry to further competition.
Genting International's funding will add to the $2.17 billion raised in an August rights offer and $450 million of convertible bonds sold in April to fund its project on Sentosa. The development will include South-east Asia's first Universal Studios theme park.
The company's borrowing consists of a $4 billion loan and $192.5 million in a bank guarantee facility, the statement said. The company has US$1.4 billion of outstanding debt. Genting International declined to comment on the terms of the loan except that it is "very happy" with them.
"The credit facilities were raised as scheduled and planned for the development," said Mr Tan Hee Teck, chief executive officer of Resorts World at Sentosa. "Despite the challenging environment in the global credit markets, the banks have been very supportive."
The mall and gaming resorts are part of Singapore's efforts to triple tourism revenue to $30 billion by 2015. The Republic ended a four-decade casino ban in 2005.
The Singapore resorts aim to capture a slice of the regulated gambling market in the Asia-Pacific region, expected to expand 16 per cent a year to US$30.3 billion in 2011.
Genting Bhd runs casino resorts in Malaysia. Genting International, which holds the parent company's overseas assets, also owns the UK's biggest casino operator, Stanley Leisure. — Bloomberg
