Fitch keeps Crown under negative ratings watch

Fitch put Crown on negative ratings watch in November 2020.
Fitch put Crown on negative ratings watch in November 2020.

The ratings agency has decided to maintain Crown Resorts under its Rating Watch Negative (RWN) as the company is still facing two Royal Commissions.

Australia.- Fitch Ratings has confirmed that Crown Resorts will remain on its Rating Watch Negative (RWN) due to the uncertain impact of regulatory inquiries. The ratings agency says it will resolve the RWN once the outcomes of regulatory actions are known and it can assess the impact on Crown’s operations and financial profile.

Fitch Ratings placed Crown Resorts ‘BBB’ Long-Term Issuer Default Rating (IDR) and senior unsecured rating on RWN last November due to the increased regulatory risks the company was facing.

Crown Resorts is currently facing Royal Commissions in Western Australia and Victoria to determine whether it is suitable to hold its gaming licences. The final reports are expected in October 2021 and March 2022, respectively. 

KPMG, Crown Resorts’ auditor, has recently warned that multiple investigations and the impact of the Covid-19 pandemic have created significant uncertainties over whether the Australian casino operator can continue to operate. 

Since the company faced money-laundering allegations in 2019, it has been involved in legal disputes and is currently facing two Royal Commissions. Crown has also said that the Australian Transaction Reporting and Analysis Centre (Austrac) is “very likely” to bring a civil lawsuit against its casinos in two cities, which could lead to hefty fines.

According to the Strait Times, the auditors’ report said Crown bonds were in danger of being reimbursed if its credit score falls beneath speculation grade. 

Crown Resorts has made reforms, but Adrian Finanzio, counsel assisting the inquiry, has told Victoria’s Royal Commission that Crown Melbourne should lose its casino licence due to serious misconduct.

Crown Resorts to lease casinos if it loses its gambling licences

Steven McCann, Crown Resorts CEO, has said that the company could lease its casinos.

According to The Sydney Morning Herald, McCann said: “Clearly we have to anticipate a range of scenarios and be flexible enough to respond to the scenarios that are presented.”

McCann said: “We will consider all options to maximise shareholder value in the context of however the regulatory environment plays out. Crown has three of the best integrated resorts in the world. I’m sure there will be people looking with interest at how things play out.”

The Western Australian Royal Commission into Crown Perth will continue until March 2022, but the gaming regulator may call on Racing and Gaming Minister Reece Whitby to cancel Crown’s licence before the end of the inquiry.

Victoria’s Royal Commission into Crown Resorts will continue until October 15 after the government approved judge Raymond Finkelstein’s request for an extension.

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