Chen Lip Keong’s NagaCorp to retap US debt notes


KUALA LUMPUR: S&P Global Ratings expects NagaCorp Ltd’s (Naga; B+/Stable/–) liquidity will be bolstered by the proposed retap of the US-dollar-denominated senior unsecured notes due 2024.

The issuance is under the same terms and conditions as the original notes which it rated in June 2020, the rating agency said in a statement on Monday.

“We expect Naga to use the net proceeds for working capital and general corporate purposes, ” it said about NagaCorp, whose founder and controlling shareholder is Tan Sri Chen Lip Keong.

“Considering its cash balance of US$473mil as of March 31,2021, we expect the proposed retap to add to its liquidity buffer, following the repayment of US$300mil senior unsecured notes that matured on May 21,2021, ” the rating agency said.

The rating on the notes is the same as the issuer credit rating on Naga because we see no elements of subordination risk in the company’s capital structure.

As of March 31,2021, Naga’s capital structure consisted of about US$650 million senior unsecured notes.

“While its casinos have closed again since March 2021 after some employees tested positive for Covid-19, we expect the company’s captive local demand from expatriates and its monopoly in Phnom Penh to help the company’s operations recover in 2021, and return eventually to pre-pandemic levels by 2022 or 2023.

“Following the retap, we expect Naga’s 2021 adjusted debt-to-Earnings before interest, tax, depreciation and amortisation (Ebitda) to range 1.9 times to 2.2 times for 2021.

“The stable rating outlook on Naga reflects our expectation that the company will sustain its dominant market position in the Cambodian gaming industry and continue to ramp up its Naga2 operations, ” it said, adding the report does not constitute a rating action.

According to NagaCorp’s website, it is one of the world’s most profitable gaming companies, and the largest gaming entertainment company in the Mekong Region.

Its unit NagaWorld owns, manages and operates Phnom Penh’s only integrated hotel-casino entertainment complex, which owns a casino license with a 70-year tenure (until 2065) and a 51-year monopoly within a 200 km radius of Phnom Penh (until 2045).

The website said the company was the first gaming IPO on the Hong Kong Exchange, and was the first foreign-owned company with operations in Cambodia ever listed overseas.

Since its listing in 2006 to date, NagaCorp said it has achieved significant success in private-public sector cooperation. It has raised the international profile of its host country, contributing to local tourism gross domestic product (GDP) and attracting foreign direct investments (FDI).

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