The ratings of Las Vegas Sands Corp., SJM Holdings Ltd. and MGM Resorts International have been downgraded due to uncertainty surrounding the Covid-19 pandemic and a possible increase in the oversight of gaming concessionaires.<\/p>\n\n\n\n\n\n\n\n
Macau.-\u00a0Fitch Ratings has revised its outlook<\/strong>\u00a0for three Macau casino operators and placed them with negative ratings, mainly due to “regulatory uncertainty” in Macau. It’s downgraded Las Vegas Sands Group (the parent company of Sands China Limited), MGM Resorts International (the parent company of MGM China Holdings Limited) and SJM Holdings Ltd.<\/p>\n\n\n\n Analysts said the decision was taken because “failure to secure a new gaming concession or more onerous economic licensing conditions” may have a significant negative credit impact.<\/p>\n\n\n\n However, the ratings agency stated that it expects the arrangement to be \u201cpragmatic\u201d in the period after June 2022, when the six existing Macau casino operating agreements will expire.\u00a0Fitch added that it believes all three will “continue to operate in Macau<\/strong>\u00a0for a long time.”<\/p>\n\n\n\n Las Vegas Sands<\/strong>‘\u00a0current rating is “BBB-“, which is the lowest “investment grade” level, as its business or financial conditions may “no longer meet investment grade” in terms of ratings.\u00a0Meanwhile, Fitch said that the domestic credit status of\u00a0MGM Resorts<\/strong>\u00a0is consistent with the “BB-” issuer’s default rating, thanks to its fully restored US business \u2013 Macau contributes less to its annual cash flow (about 20 per cent).<\/p>\n\n\n\n As regards\u00a0SJM Holdings<\/strong>, analysts said the casino operator remains on track to refinance its existing bank loans, which will expire at the end of February 2022, with a new loan line of HKD19.0bn (US$2.44bn).<\/p>\n\n\n\n Fitch Ratings stated: “Fitch views the possibility of incumbent concession holders failing to secure a new concession as low, though the risk should not be ignored.\u00a0<\/p>\n\n\n\n “The operators have invested billions of U.S. dollars in capital, are large local employers and critical government taxpayers, and have supported the local and Mainland government\u2019s broader policy goals, such as the Greater Bay Area Initiative<\/a>.”<\/p>\n\n\n\n