Fitch Ratings has downgraded Crown Resort’s issuer default rating from BBB to BB-.
Australia.- Fitch Ratings has downgraded Crown Resort’s issuer default rating and the senior unsecured rating on the financing entity, Publishing and Broadcasting (Finance) Ltd.
It said the downgrade to BB- reflects “the deterioration in Crown’s financial profile following the completion of the acquisition by new owner Blackstone BidCo, based on the more aggressive capital structure put in place to fund the transaction.”
Both ratings have been maintained on Rating Watch Negative (RWN) reflecting Fitch’s view that Crown’s rating could be downgraded further following the completion of Blackstone’s review of Crown’s future operations.
However, the rating agency said it expects that “limited information will be made public to enable a full assessment of Crown’s business and financial profile once the review is complete, following Crown’s delisting from the Australian Stock Exchange and Blackstone’s intention to operate it as a private company.”
Blackstone has said it wants to maintain Crown’s strategic direction but will review Crown’s operations and organisational structure once the acquisition is complete. Fitch expects Crown’s business profile to retain many of its strong structural features, including Australia’s overall licensing and regulatory regime.
However, uncertainty remains about the ultimate strategy and the level of funding required, which could result in Crown’s debt remaining at levels higher than expected.
Analysts stated: “We expect Crown to continue to benefit from its diversification across Australia in favourable regulatory regimes that have a stable and mature demand profile, and from being the sole licenced casino operator in Victoria and Western Australia.”
A week ago, Crown Resorts was granted a conditional licence in Sydney that will expire on December 31, 2023, with the potential for full certification.