{"id":299291,"date":"2023-11-17T01:58:59","date_gmt":"2023-11-17T07:58:59","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=299291"},"modified":"2023-11-17T14:59:19","modified_gmt":"2023-11-17T20:59:19","slug":"melco-credit-outlook-draws-moodys-upgrade","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/","title":{"rendered":"Melco Resorts Credit Outlook Upgraded by Moody\u2019s"},"content":{"rendered":"

The outlook on Melco Resorts & Entertainment\u2019s (NASDAQ: MLCO) credit rating was upgraded to \u201cstable\u201d from \u201cnegative\u201d by Moody\u2019s Investors Service.<\/p>\n

\"Melco
Melco Resorts CEO Lawrence Ho. Moody’s Investors Service upgraded its outlook on Melco’s junk credit rating. (Image: Bloomberg<\/em>)<\/figcaption><\/figure>\n

That move comes on the heels of strong third-quarter results issued last week by the City of Dreams operator. Rising gross gaming revenue (GGR) in the Macau Special Administrative Region (SAR), one of Melco\u2019s marquee markets, contributed to the improved outlook.<\/p>\n

The outlook change to stable from negative reflects our expectation that the Melco group’s financial leverage will improve significantly over the next 12-18 months amid a robust recovery of the gaming market in Macao SAR, China,\u201d<\/strong> noted Moody\u2019s analyst Gloria Tsuen.<\/p><\/blockquote>\n

Moody\u2019s has a junk rating of \u201cBa3\u201d on Lawrence Ho\u2019s gaming company. The operator lost $100 million last year. Still, Moody\u2019s estimates Melco will improve significantly this year as the ratings agency forecasts earnings before interest, taxes, depreciation, and amortization (EBITDA) will rise to $900 million, before surging to $1.4 billion<\/a> in 2024. That\u2019s up from forecasts issued earlier this year of $700 million and $1.2 billion, respectively.<\/p>\n

Melco Liquidity Helps<\/h2>\n

At the end of the third quarter, Melco had $1.2 billion in cash on hand, not including restricted cash. That implies some level of value, because the operator\u2019s market capitalization is $3.1 billion, perhaps indicating the investment community isn\u2019t giving the gaming company the credit it deserves for its cash stockpile.<\/p>\n

\n

Additionally, that steady balance indicates Melco can service its liabilities for the foreseeable future — a relevant point when considering Macau concessionaires\u2019 debt<\/a> ballooned as a result of the coronavirus pandemic. Melco has no debt coming due prior to 2025.<\/p>\n<\/div>\n

\u201cThese resources and improving operating cash flows will be sufficient to cover the company’s capital spending and short-term debt repayments for the next 12-18 months,\u201d added Tsuen.<\/p>\n

The ratings agency cited Melco\u2019s high-quality assets and robust long-term growth in Macau as factors supporting the operator\u2019s credit rating.<\/p>\n

How Melco Can Land an Upgrade<\/h2>\n

Melco\u2019s current credit rating of \u201cBa3\u201d is three notches below investment-grade<\/a> territory, so getting to that range could take some time. But upgrades to the higher end of junk are possible. That would require further earnings gains and driving debt-to-EBITDA down to 4.5x to 5x. That ratio was around 3.3x prior to the pandemic. Those factors could also highlight downgrade potential if they move in the wrong direction.<\/p>\n

Conversely, Moody’s could downgrade MRF’s ratings if MRE’s adjusted debt\/EBITDA returns to above 5.5x-6.0x on a sustained basis, or if its liquidity weakens. This situation could result from a weaker-than-expected earnings recovery, a failure to reduce debt, or the company’s aggressive financial policy,\u201d noted the ratings agency.<\/p><\/blockquote>\n

In Macau, Melco operates City of Dreams, Morpheus, Studio City, and Altira.<\/p>\n","protected":false},"excerpt":{"rendered":"

The outlook on Melco Resorts & Entertainment\u2019s (NASDAQ: MLCO) credit rating was upgraded to \u201cstable\u201d from \u201cnegative\u201d by Moody\u2019s Investors Service. That move comes on the heels of strong third-quarter results issued last week by the City of Dreams operator. Rising gross gaming revenue (GGR) in the Macau Special Administrative Region (SAR), one of Melco\u2019s […]<\/p>\n","protected":false},"author":46,"featured_media":228256,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,10],"tags":[81913,81903],"acf":[],"yoast_head":"\nMelco Credit Outlook Draws Moody's Upgrade<\/title>\n<meta name=\"description\" content=\"Melco Resorts & Entertainment credit outlook lifted by Moody's.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Melco Credit Outlook Draws Moody's Upgrade\" \/>\n<meta property=\"og:description\" content=\"Melco Resorts & Entertainment credit outlook lifted by Moody's.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-17T07:58:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-17T20:59:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/\",\"url\":\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/\",\"name\":\"Melco Credit Outlook Draws Moody's Upgrade\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\",\"datePublished\":\"2023-11-17T07:58:59+00:00\",\"dateModified\":\"2023-11-17T20:59:19+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Melco Resorts & Entertainment credit outlook lifted by Moody's.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/melco-credit-outlook-draws-moodys-upgrade\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\",\"width\":1200,\"height\":800,\"caption\":\"Melco Resorts CEO Lawrence Ho. S&P Global Ratings says the casino operator can make progress on deleveraging this year. 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