Crown Delays Redemption of Crown Subordinated Notes II CWNHB

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Crown subordinated notes

Due to an uncertain operating environment, Crown Resorts has announced that it will not be redeeming the Crown Subordinated Notes II (CWNHB) at the 23 July 2021 call date.

The unsecured notes issued by Crown have a total outstanding principal of $630 million. 

Crown said in its update to the market on Monday: “Having regard to the impact of COVID-19 on Crown’s businesses and the various regulatory investigations, the Crown Board has decided not to redeem Notes II on the First Call Date. 

“Subject to there being no major change in circumstance, Crown intends to review the role of Notes II in its capital structure in around 12 months’ time, at which point Crown expects to have improved certainty on its operational and regulatory position.”

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Bell Potter analysts said in a letter to clients this week, “While this is a surprise for an investment grade issuer to miss a Call Date with its Melbourne and Perth casinos not being subject to indefinite closures, it indicates Crown wishes to utilise financial flexibility of CWNHB while it awaits the determination on its NSW casino licence, and outcomes on the Royal Commissions in Victoria and Western Australia. Crown is also subject to corporate activity from Blackstone, Oaktree and The Star Entertainment Group.”

What It Means For Noteholders

In the meantime, Noteholders will continue to receive quarterly interest payments in accordance with the Terms, with the next scheduled Interest Payment Date being 14 June 2021. Noteholders can continue to buy and sell Notes II on the ASX. 

Crown said that it intends to review the role of Notes II in its capital structure in around 12 months’ time.  Crown does have the option to redeem CWNHB at any future quarterly interest payment date. 

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Brenton Gibbs
Brenton is the editorial and social media director of Fixed Income News Australia and responsible for the editorial content development and social media presence of the site. He has written widely across a number of industry platforms including property, tourism, business and education. He is a director and co-founder of communications, content and creative agency RGC Media & Mktng and editorial contributor to MBA News Australia.

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