![Fitch Maintains BB- Rating for SJM Holdings, Cites Stable Macau Recovery](/api/files/image/cm55nqiv70wqedxsyuyyst01z/thumbnail.jpg)
Fitch Maintains BB- Rating for SJM Holdings, Cites Stable Macau Recovery
SJM Holdings maintained its "BB-" credit rating with a "stable" outlook from Fitch Ratings, remaining three notches below investment grade. While Macau's economic recovery supports the rating, high debt levels from the Grand Lisboa Palace (GLP) development continue to impact the company's financial position.
The gaming operator is actively working to reduce its leverage, with projections showing potential improvement in debt/EBITDA ratio from 6.9x in 2024 to 3.9x in 2026. This would position the company below Fitch's "negative sensitivity" threshold of 5x.
Macau's gaming market outlook remains positive, with Fitch expecting:
- Moderate gross gaming revenue growth in 2025
- Increased visitation driven by concerts and events
- Further easing of travel requirements between Macau and mainland China
- Government projections of MOP240 billion in GGR and 36 million visitors
Grand Lisboa Palace continues to show promising growth:
- Current market share: 2.6% (Q3 2024)
- Expected 2025 market share: 3.0%
- Long-term target: 5% market share
- Growth supported by improved connectivity and expanded amenities
- New 50,000-capacity outdoor concert venue opening in early 2025
SJM's capital expenditures are expected to remain manageable at approximately $193.1 million over the next few years, supporting the company's debt reduction strategy while maintaining operational growth.
The "BB" rating indicates some exposure to default risk during adverse business conditions, though the company maintains adequate financial resources for debt servicing. SJM's long operational history in Macau and conservative financial management approach continue to support its credit profile.
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