S&P puts Melco Crown (Macau), Studio City on watch

S&P Global Ratings said it placed its BB long-term corporate credit rating and cnBBB- long-term Greater China regional scale rating on Melco Crown (Macau) Ltd. (Melco Crown) on CreditWatch with negative implications.

S&P also placed its BB- long-term issue rating and cnBB+ long-term Greater China regional scale rating on the senior unsecured notes that MCE Finance Ltd. issued on CreditWatch with negative implications. Melco Crown guarantees the notes.

At the same time, S&P placed its BB- long-term corporate credit rating on Studio City Co. Ltd., the BB- long-term issue rating on the company's senior secured notes, and the B long-term issue rating on the senior unsecured notes that Studio City guarantees on CreditWatch with negative implications.

S&P also placed its cnBB+ long-term Greater China regional scale rating on Studio City and its senior secured notes, and the cnBB- rating on the senior unsecured notes on CreditWatch with negative implications.

“We placed the ratings on Melco Crown on CreditWatch after the company's ultimate parent Melco International Development Ltd. agreed to purchase 13.4% of the issued shares of Melco Crown Entertainment Ltd. (MCE) for about US$1.2 billion,” said S&P credit analyst Sophie Lin in a news release.

“The share purchase will likely be debt funded, and we expect that it could significantly increase Melco International's debt leverage and weaken its consolidated credit metrics,” S&P said in the release.

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