Galaxy project gets HK$8.8b financing

After months of delays, Galaxy Entertainment said yesterday it has secured an HK$8.8 billion loan to complete its half-finished Cotai mega-resort, signalling an end to the debt-market drought for Macau casino developers.

The firm controlled by property and construction tycoon Lui Che-woo had originally planned to seal a deal with lenders by the end of last year to complete the construction of its HK$14.1 billion, 2,200-room casino complex. Galaxy said it agreed to pay 4.5 per cent over Hong Kong's interbank rate for a six-year club loan backed by seven mainland-led Asian banks. The loan 'fully funds' the Cotai project and it is on schedule to open 'early next year'.

'This deal gets us across the goal line,' Galaxy chief financial officer Bob Drake said.

Galaxy's announcement likely signals a resurgence of bank lending in Macau, whose debt-laden gaming companies were particularly hard hit during the financial crisis as markets dried up and several multibillion-dollar projects were stalled.

'This is the first such large-scale loan since the financial tsunami,' said Shen Xiaoqi, chief executive of the Industrial and Commercial Bank of China (Macau), which leads the Galaxy lending syndicate.

Sands China is attempting to close a US$1.75 billion syndicated loan that it announced in November following its HK$19.4 billion Hong Kong listing. The Macau unit of Sheldon Adelson's Las Vegas Sands Corp will use the loan to fund the completion of a half-built, 6,000-room Cotai project that at US$4 billion would be Macau's most expensive resort yet.

At the same time Melco Crown Entertainment, the joint venture between Lawrence Ho Yau-lung and Australian James Packer, is attempting to tap the debt markets to re-finance a US$1.75 billion construction loan it used to build its US$2.1 billion, three-hotel City of Dreams casino complex.