S&P stabilizes Melco Resorts view

S&P said it revised its outlook for Melco Resorts (Macau) Ltd. and Studio City Co. Ltd. to stable from negative and affirmed Melco’s BB- ratings and Studio City’s ratings at B+. Both are operating units of Melco Resorts & Entertainment Ltd. (MLCO).

“MLCO's Macao revenue and cash flow are recovering materially faster than we previously assumed, supporting more rapid deleveraging. Macao's gaming revenue has been rebounding faster than we anticipated. This follows a relaxation of Covid-19 control measures and travel restrictions earlier in the year,” S&P said in a press release.

The stable outlook indicates MCLO faster recovery should help cash flow and reduce leverage to below the agency’s downgrade threshold in late 2023 or early 2024, S&P said.

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