Moody's: Asia Pacific gaming companies stable

Moody's Investors Service said it sees a stable rating outlook overall for the Asia Pacific gaming and entertainment sector, but the general credit trend is weakening.

Most rated companies, which include Star Cruises Ltd., Genting Bhd., NCL Corp. Ltd., Galaxy Casino SA and Venetian Macao Ltd., are gearing up balance sheets to fund capital expenditures or undertake business restructuring, the agency said, and therefore heightened execution risks associated with sizable development programs are part of the agenda.

The region's gaming sector is undergoing a significant revolution, particularly in Macau, which has been the center of global attention since it liberalized its gaming industry in 2002, Moody's said. Conditions in Macau are highly favorable to the gaming and leisure sector, underpinned by advantageous demographic trends and a positive economic climate, the agency said.

However, given that expansion in Macau is largely debt-funded, high gearing is the norm, Moody's said, and rapid growth and heightened competition will create a degree of uncertainty for the companies involved.

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