Moody\u2019s has downgraded SJM Holdings\u2019 corporate family rating to Ba3 from Ba2.<\/p>\n\n\n\n\n\n\n\n
Macau.- Moody’s has cut SJM Holdings<\/strong>\u2019 debt rating. The casino operator’s corporate family rating has been cut from Ba3 to Ba2. Both ratings are considered non-investment grade, with speculative elements and substantial credit risk.<\/p>\n\n\n\n Moody\u2019s has also downgraded the backed senior unsecured ratings on bonds issued by an associated entity, Champion Path Holdings Ltd<\/strong>, that are guaranteed by SJM Holdings. They have been downgraded from B1 from Ba3<\/strong>.<\/p>\n\n\n\n \u201cThe downgrade is mainly driven by the slower recovery prospects for SJM\u2019s gaming revenue during 2022-23 than we previously expected,\u201d said Sean Hwang<\/strong>, Moody\u2019s assistant vice president and analyst, in a press release on the rating change.<\/p>\n\n\n\n Hwang added: \u201cThe company\u2019s continued cash burn in 2022 because of the persistently weak operating environment amid China\u2019s enduring Covid-19 restrictions, and the expected gradual recovery starting only from 2023, suggest that SJM\u2019s financial leverage will remain elevated over the next few years.\u201d<\/p>\n\n\n\n He also said: \u201cThe rating review continues to reflect SJM\u2019s weak liquidity because of the company\u2019s delay in refinancing its loan maturity with long-term debt. SJM\u2019s ratings are likely to be confirmed once the refinancing is completed.\u201d<\/p>\n\n\n\n Moody\u2019s has lowered its forecasts for the city\u2019s mass-market casino gross gaming revenue in 2022 and 2023 to around 40 per cent and 80 per cent of 2019 levels, respectively.<\/p>\n\n\n\n