MGM Osaka financing guaranteed, Japan's historic multi-billion dollar loan
The development group behind MGM Osaka secured final financing this week to make the integrated casino resort a reality.
MGM Osaka is a more than $8 billion project located on the city's Yumeshima, a man-made property covering approximately 700 hectares. The integrated casino resort covers approximately 52 acres.
MGM Resorts International and Tokyo-based global financial services group ORIX Corp. have a 42.5% equal partnership. The remaining 15% is controlled by several Japanese companies including Panasonic, Kansai Electric and West Japan Railway.
Japanese media outlet Nikkei reported today that MGM and Orix had secured 530 billion yen ($3.42 billion) in loans from two Japanese banks. The lenders are Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corporation.
Mitsubishi Financial is a subsidiary of Mitsubishi Group, a privately held conglomerate best known in the United States for its electronics and automobiles. The company's financial arm is one of the world's largest lenders and holding companies.
The financing completes MGM Osaka's funding package, valuing the company at 1.27 billion yen ($8.2 billion).
Historic Financial Agreement
MGM Osaka's $8.2 billion financing structure is the most comprehensive multi-bank co-financing deal in the country's history, and the project is expected to take more than five years, according to preliminary MGM official plans, according to multiple news reports in Japan. Open destination in 2030.
MGM Osaka is the only ongoing casino project in Japan. Japan approved as many as three casinos in 2018, catching the attention of the world's largest casino developers and operators. However, the country's long regulatory path has led to most of the closures in the Land of the Rising Sun.
MGM remains steadfast in its goal to become Japan's first casino operator. The project in Osaka will be unique in the company's history.
Dream Island brought unprecedented construction challenges to MGM. Preparing the site cost $173 million as workers had to install 230-degree steel beams to reach bedrock.
With the property secured and ready for a massive resort, MGM broke ground in December. The plans include 2,500 hotel rooms, 400,000 square meters of conference space and a series of attractions "showcasing the best of Osaka and Japan". Casino space is limited to 3% of the resort’s total indoor space.
Weak Yen
The yen fell to its lowest level against the U.S. dollar since 1990 on Wednesday, now trading at nearly 155 yen to the dollar, which is only helping MGM finance its projects in Japan.
A strong dollar benefits MGM as the U.S.-based company uses its cash reserves and financing it obtained in the U.S. to fund some of its operations in Japan
A weak yen means the overall cost of the MGM project is falling. When county officials selected the MGM Osaka site, the cost of the integrated resort was estimated at about $10 billion. But as the yen has fallen nearly 30% against the dollar over the past five years, costs have fallen by about $1.8 billion.
Read also:
- Games Industry Research: Carbon Emissions of Top Video Games
- U.S. cities with the most Swifties per capita
- Blackjack Casino Advantage: How to Beat the Odds
- Football 101: What is relegation in football?
Source: www.casino.org
