SkyCity Unveils Fresh NZ$125 Million Bond Offer

New Zealand’s SkyCity Entertainment Group has announced a NZ$125 million (US$90 million) retail bond offer, with the option of another NZ$50 million (US$36 million) oversubscription, as it seeks to prop up liquidity after being hit financially by the coronavirus pandemic and the subsequent lockdowns.

Announced last week, the bond offer comprises 6-year unsecured, unsubordinated fixed-rate bonds that are due to expire on 21st May 2027. The bonds are available to New Zealand institutional investors and retail investors. SkyCity, which was founded in 1996, said it expects the bonds to have a “BBB-” rating by S&P Global Ratings.

The announcement of the bonds came with a market update from SkyCity who pointed towards the “resilient performance” of its flagship asset, SkyCity Auckland, and its electronic gaming machine segment.

The market update also described the performance of SkyCity Adelaide as consistent in the months of March and April and also in line with the property’s performance in December and February, having launched an AU$330 million refurb at the end of 2020.

Big Spike in its Online Casino

Although SkyCity did not provide any figures from its properties, the company headed up by CEO Graeme Edward Stephens did note the continued growth of its online gaming business, SkyCity Online Casino. It was stated that SkyCity Online Casino has seen the number of active customers grow from 24,400 in mid-February to 38,000 by the end of April.

The company said in a statement:

“Despite positive current trading, there is no change to the previous guidance for FY21 SkyCity expecting Group normalized EBITDA to be above FY20 but still well below pre-COVID-19 levels and FY19 levels,”

“The operating environment remains unpredictable due to COVID-19 and accordingly SkyCity is unable to provide formal earnings guidance at this time.”

Previously, SkyCity reported a 76.1% annual decline in net profit to NZ$78.4 million (US$56.4 million) for the six months to 31 December 2020. The group-wide revenues fell 37.7% to NZ$449.9 million (US$323.8 million).