Melco Resorts & Entertainment’s credit rating has been downgraded by S&P Global due to a slow recovery amid the Covid-19 pandemic in Macau and the Philippines.<\/p>\n\n\n\n\n\n\n\n
Macau.- The casino operator\u00a0Melco Resorts & Entertainment<\/strong>\u00a0has had its credit rating downgraded because of the Covid-19 pandemic and resulting slow performance. S&P Global also downgraded the company’s Studio City unit\u00a0from BB to BB-<\/strong>. It doesn’t expect a full recovery for Macau until 2023.<\/p>\n\n\n\n According to analysts,\u00a0Macau’s GGR for next year will only reach between 60 to 70 per cent\u00a0<\/strong>of 2019 levels. Melco’s EBITDA will reach pre-pandemic levels in 2023, they predict. <\/p>\n\n\n\n “We anticipate leverage will stay elevated at 6.0x-7.0x in 2022 and then decline to 3.3x-3.7x in 2023,” the analysts said. “This compares with our earlier expectation that MLCO will improve its leverage to below 3.5x by late 2021 or early 2022 on a run-rate basis.”<\/p>\n\n\n\n Although revenue recovery has been slow, the casino operator is proceeding with its\u00a0Studio City Phase II<\/a>\u00a0development and\u00a0City of Dreams Cyprus<\/a>, which will bring about a 40 per cent increment in the organisation’s obligation in 2023 when compared with 2019 levels.\u00a0<\/p>\n\n\n\n Regarding\u00a0Macau’s gaming law revision<\/a>, S&P Global said Melco is sure to have the option to reestablish its concession, but authorities might force new conditions that could affect income.<\/p>\n\n\n\n According to local media reports, authorities in Macau want to end the current sub-concession system<\/strong> that led to the creation of three additional Macau casino licences. The government also wants to increase the oversight of gaming concessionaires and junket operations<\/strong>, but it will maintain at least six gaming concessions.<\/p>\n\n\n\n The government also wants to increase the oversight of gaming concessionaires and junket operations<\/strong>, but it will maintain at least six gaming concessions. Representatives from Macau\u2019s casino operators<\/strong> have attended a public consultation session with authorities<\/a> and asked for more information on the government\u2019s proposed changes.<\/p>\n\n\n\n The road to recovery for the gaming industry in Macau has a long way to go, with analysts now predicting that gross gaming revenue<\/a> may not return to pre-pandemic levels until 2025<\/strong>.<\/p>\n\n\n\nMacau\u2019s gaming market may not recover until 2025, analysts say<\/h2>\n\n\n\n