Moody's confirms Galaxy Casino

Moody's Investors Service said it confirmed the B1 corporate family rating and senior unsecured rating of Galaxy Casino SA and stable outlook. This action concludes the review for possible downgrade begun in December.

The review began because of the issuance of a convertible bond by Galaxy's parent, Galaxy Entertainment Group Ltd., which substantially increased consolidated group debt. However, Moody's said it has concluded that the impact of this issuance is not material enough to warrant a downgrade to the rating at the Galaxy level.

According to terms of the bond, the company cannot repay the intra-group loan with alternative debt unless bond covenant restrictions are satisfied, the agency said. This provides protection to bondholders, Moody's added.

Moody's also noted that Galaxy's operating profile has improved with the recent opening of StarWorld, the use of fixed-price construction contracts for a material portion on the Cotai Mega Resort and ongoing growth in the Macau gaming market.

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