S&P takes Melco Crown (Macau) off CreditWatch Negative

HONG KONG – S&P Global Ratings today affirmed its 'BB' long-term corporate credit rating on Melco Crown (Macau) Ltd. (Melco Crown). It said the outlook is negative. “At the same time, we lowered our long-term Greater China regional scale rating on the Macau-based casino operator to 'cnBB+' from 'cnBBB-' and on the notes to 'cnBB' from 'cnBB+', said S&P Global Ratings credit analyst Sophie Lin.

“We removed all the ratings from CreditWatch, where they were placed with negative implications on December 19, 2016.
 
"We affirmed the ratings because we believe Melco Crown's debt service capability is unlikely to materially weaken following its ultimate parent's proposed debt-funded purchase of 13.4% of the issued shares of Melco Crown
Entertainment Ltd (MCE).

“The group's strong operating cash flow and reduced capital investment requirement provide a buffer for potentially higher investments or shareholder returns over the next 12-24 months, in our view.

“We expect MCE to generate stronger operating cash flow over the next 12-24 months, driven by the accelerated ramp-up of Studio City, and an improvement in EBITDA margin. The rebound of the gaming industry in Macau since the fourth quarter of 2016 underpins our anticipation.”  www.standardandpoors.com (ATI).