Credit Crunch Hits Casino Loan Deal
The Age
Friday September 7, 2007
BANKERS' reluctance to make big corporate loans has forced Publishing and Broadcasting Ltd to cut the borrowing target for its Asian casino joint venture by more than $A1.2 billion.
PBL and its casino partner, Melco International, said in June they had secured $US2.75 billion in credit for the City of Dreams development in Macau - China's dominant gaming region.But recent sharemarket and lending problems in the US have prompted Melco PBL Entertainment to renegotiate with its bankers, resulting in the size of the loan falling to $US1.75 billion ($A2.1 billion).The new credit has been provided by Citigroup and the five banks involved in the June deal - ANZ, Bank of America, Barclays Capital, Deutsche Bank AG and UBS AG. It includes a $US1.5 billion, seven-year loan and $US250 million in credit available for five years.As well as accepting the cut in funds, Reuters reported that Melco PBL had also agreed to lift the interest repayment rate on the debt by 50 basis points (0.5 per cent).In the previous funding announcement, Melco PBL said its cost estimate for the City of Dreams development had increased to $US1.85 billion.There was no updated guidance in yesterday's announcement, but Melco PBL said the $US1.75 billion was "sufficient to meet the projected cost of constructing and developing the first phase of City of Dreams".The development is expected to be opened by May 2009. Melco PBL also wants to build a $US353 million apartment and hotel complex on the site. PBL shares rose 7? to $18.40.-- With REUTERS
© 2007 The Age