Moody's trims SJM

Moody's Investors Service said it cut SJM Holdings Ltd.'s corporate family rating to Ba3 from Ba2. The agency also downgraded to B1 from Ba3 the backed senior unsecured ratings on the bonds issued by Champion Path Holdings Ltd. and guaranteed by SJM.

The ratings remain on review for further downgrade.

"The downgrade is mainly driven by the slower recovery prospects for SJM's gaming revenue during 2022-23 than we previously expected. The company's continued cash burn in 2022 because of the persistently weak operating environment amid China's enduring Covid-19 restrictions, and the expected gradual recovery starting only from 2023, suggest that SJM's financial leverage will remain elevated over the next few years," said Sean Hwang, a Moody's assistant vice president and analyst, in a press release.

"At the same time, the rating review continues to reflect SJM's weak liquidity because of the company's delay in refinancing its loan maturity with long-term debt. SJM's ratings are likely to be confirmed once the refinancing is completed," Hwang said.

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