Analysts at Fitch Ratings have said that Crown Resorts’ credit rating could be downgraded several levels due to its new owners’ comfort with higher debt levels.<\/p>\n\n\n\n\n\n\n\n
Australia.- Crown Resorts <\/strong>could see its credit rating downgraded if Blackstone Inc<\/strong>\u2018s acquisition of the company goes ahead. Analyst at Fitch Ratings say their assessment, based on Blackstone’s history in the US gaming industry, suggested is that the fund is happier with higher leverage than traditional operators.<\/p>\n\n\n\n In February, the board of\u00a0Crown Resorts Ltd<\/strong>\u00a0has unanimously backed investment firm\u00a0Blackstone Inc<\/strong>\u2018s offer to\u00a0acquire all the shares of Crown Resorts<\/a>\u00a0in a deal that values the firm at\u00a0AUD8.9bn (US$6.36bn)<\/strong>. Blackstone Group had increased its offer<\/a>\u00a0from AU$12.50 (US$9.11) to AU$13.10 (US$9.55) cash per share in January.<\/p>\n\n\n\n Fitch said it had conducted a scenario analysis of the impact of separating Crown’s gaming operations from its real estate assets, a model commonly used in the United States but not yet seen in Australia. They predicted the gaming operation\u2019s adjusted net leverage for the financial year ending in June 2024 would be 5.6x-7.2x.<\/p>\n\n\n\n Fitch Ratings stated: \u201cThis is above the 3.0x trigger above which we would take negative rating action. We expect that in this scenario, any rating action would result in a multi-notch downgrade, as such leverage levels are more commensurate with the metrics of \u2018B\u2019 category rated gaming issuers or below, depending on leverage within the property company.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Analysts at Fitch Ratings have said that Crown Resorts’ credit rating could be downgraded several levels due to its new owners’ comfort with higher debt levels.<\/p>\n","protected":false},"author":176,"featured_media":25558,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"is_press_release":false,"is_interview":false,"is_opinion":false,"focusai_summary":"Fitch Ratings indicates a potential multi-notch credit rating downgrade for Crown Resorts following Blackstone Inc.'s acquisition, citing Blackstone's higher leverage tolerance. This assessment is based on a scenario where Crown's gaming operations are separated from its real estate assets, a common model in the US, which would significantly increase the gaming entity's adjusted net leverage beyond Fitch's negative rating action trigger.","focusai_entities":"Crown Resorts, Fitch Ratings, Blackstone Inc.","focusai_location":"Australia, United States","focusai_target_profile":"ceo_executive (0.9), regulator (0.7), operator_casino (0.8), investor_analyst (1.0), supplier_vendor (0.7), journalist_researcher (0.9)","focusai_suggestions":[{"label":"Leverage Impact on Operations","query":"How might Blackstone's higher leverage tolerance and the potential multi-notch downgrade of Crown Resorts' credit rating impact its operational flexibility, capital expenditure plans, and ability to secure future financing for expansion or regulatory compliance initiatives?"},{"label":"Asset Separation Precedent","query":"Given the proposed separation of Crown's gaming operations from its real estate assets, what are the regulatory and market implications for establishing this US-style REIT model within the Australian iGaming and property sectors, and could it set a precedent for other operators?"}],"footnotes":""},"categories":[16336,157,158],"tags":[16237,14657],"class_list":["post-27744","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-australasia-news","category-business-news","category-slider-home","tag-blackstone-group","tag-crown-resorts"],"_links":{"self":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/27744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/users\/176"}],"replies":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/comments?post=27744"}],"version-history":[{"count":2,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/27744\/revisions"}],"predecessor-version":[{"id":27749,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/27744\/revisions\/27749"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media\/25558"}],"wp:attachment":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media?parent=27744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/categories?post=27744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/tags?post=27744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}