MANILA, Philippines — Tycoon Enrique Razon Jr.’s casino and resort developer has obtained a 10-year refinancing for the P72-billion loan of its subsidiary, allowing it to wait for rate cuts to manage debt service.
Bloomberry Resorts Corp. subsidiary Bloomberry Resorts and Hotels Inc. (BRHI) is refinancing its P72-billion loan with a syndicate of banks to prepare for the long game debt-wise.
The facility, signed by the parties yesterday at Solaire Resort, replaces the existing P73.5-billion loan obtained in 2018 and the additional P20 billion borrowing made in 2020.
The facility provides a term of 10 years, meaning it will mature only in October 2034. It will also maintain its loan structure of having a back-ended principal payment schedule similar to the one it is replacing.
Razon, chairman and CEO of Bloomberry, sees the refinancing as a win for his company, especially as nearly two-thirds of the balance would only be due in the last five years of the term. Also, the facility is priced this time at a spread that is 75 basis points lower than its predecessor.
Most important for Bloomberry, the refinancing gives it flexibility to lock the interest rate within the next 12 months.
If bankers and economists are correct, Bloomberry should benefit from further monetary easing being delivered by the Bangko Sentral ng Pilipinas and the US Federal Reserve.
“We view this refinancing as a positive development that would allow the company to lighten its debt service and preserve cash as Solaire Resort North ramps up, improve the company’s bottom line and ultimately ensure consistent return of capital for our shareholders in the coming years,” Razon said.
The syndicate of financiers for BRHI includes BDO Unibank Inc., Bank of the Philippine Islands, China Banking Corp. and Philippine National Bank.
BDO Capital and Investment Corp. acted as lead arranger and sole bookrunner.
Bloomberry owns the Solaire Resort in Entertainment City and Quezon City, as well as the Jeju Sun Hotel and Casino in Jeju Island, South Korea.