S&P Global Ratings has downgraded its credit ratings for casino operator Las Vegas Sands Corp ands its Macau unit, Sands China Ltd, to ‘junk’, on sluggish recovery prospects for the Macau market because of the Covid-19 pandemic.
The rating agency downgraded the ratings on the two companies to “BB+”, one level below investment grade. That means their bonds are now labelled as a ‘speculative’ product, also known as ‘junk’ in investment jargon.
S&P expects market-wide 2022 gross gaming revenue in Macau to reach between 30 percent to 40 percent of its 2019 levels, i.e., pre-pandemic.
Other major international rating agencies, namely Moody’s Investors Service and Fitch Ratings Inc, still grade Las Vegas Sands’ bonds as of investment grade. Fitch placed Las Vegas Sands on “rating watch negative” in December, due to “Macau regulatory uncertainty”.
S&P also placed the rating outlook on Las Vegas Sands and Sands China as “negative”.
Sands China reported in January a net loss of US$245 million for the fourth quarter of 2021, an improvement on the US$423 million loss reported in the previous quarter. The result compares with a loss of US$246 million in the fourth quarter of 2020.
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