Fitch downgrades SJM Holdings default rating
Fitch Ratings has downgraded SJM Holding’s senior unsecured rating from BB+ to BB.
Macau.- Analysts at Fitch Ratings Inc have downgraded SJM Holdings Ltd‘s senior unsecured rating mainly due to regulatory uncertainty and the slow execution of new loans.
Analysts stated: “The downgrade is because the company has been slower than we expected in obtaining a new HK$19bn (US$2.4bn) long-term syndicated loan facility to repay existing loans due 28 February 2022, although most banks have agreed to extend the existing loans by a year.
“Material regulatory uncertainty also remains over SJMH’s gaming concession in Macau as its 20-year term is set to expire on 26 June 2022.”
On February 10, Moody’s Investors Service downgraded SJM Holdings Ltd’s corporate family rating from Ba1 to Ba2. Moody’s “Ba” rating indicates a “speculative grade” for credit quality. According to analysts, the main reason for the downgrade was SJM’s persistent delay in executing its refinancing plan which has raised concerns about its financial and liquidity management.
Analysts forecast that SJM’s EBITDA [earnings before interest, taxation, depreciation and amortisation] will return to 2019 levels by 2024 while the company’s Grand Lisboa Palace EBITDA will be HK$2.0bn in 2023 and HK$3.5bn in 2024.
