Fitch places SJM on negative watch

Fitch Ratings said it placed SJM Holdings Ltd.'s BB+ long-term foreign-currency issuer default and senior unsecured ratings of BB+ on rating watch negative. The BB+ ratings on the outstanding notes issued by Champion Path Holdings Ltd. have also been placed on RWN.

“The RWN reflects the material near-term regulatory uncertainty related to SJMH's gaming concession in Macau, whose 20-year term is set to expire on 26 June 2022. Near-term credit risk has increased with limited visibility into the re-bidding procedure, how the future regulatory and operating environment will impact cash flows and leverage, and the likelihood of incumbent operators' ability to secure new gaming concessions,” Fitch said in a press release.

The agency said it sees the company continuing to operate in Macau.

Fitch noted SJMH remains on track to refinance its bank loans, which will mature at the end of February 2022, with a new HK$19 billion loan facility. “This should leave the company with around HK$7 billion of undrawn facilities after repaying existing bank loans of around HK$11 billion as at Sept. 30, 2021, and the company's liquidity remains strong.”

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