{"id":30052,"date":"2016-09-23T08:16:04","date_gmt":"2016-09-23T08:16:04","guid":{"rendered":"http:\/\/www.gaming-awards.com\/NEWS\/?p=30052"},"modified":"2016-09-23T08:16:04","modified_gmt":"2016-09-23T08:16:04","slug":"analyst-forecasts-studio-citys-position-in-the-macau-market","status":"publish","type":"post","link":"https:\/\/gaming-awards.com\/NEWS\/analyst-forecasts-studio-citys-position-in-the-macau-market\/","title":{"rendered":"Analyst forecasts Studio City\u2019s position in the Macau Market"},"content":{"rendered":"<p><a href=\"https:\/\/gaming-awards.com\/NEWS\/wp-content\/uploads\/2015\/10\/Studio-City-opening.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-medium wp-image-28093\" src=\"https:\/\/gaming-awards.com\/NEWS\/wp-content\/uploads\/2015\/10\/Studio-City-opening-300x225.jpg\" alt=\"Studio City opening\" width=\"300\" height=\"225\" srcset=\"https:\/\/gaming-awards.com\/NEWS\/wp-content\/uploads\/2015\/10\/Studio-City-opening-300x225.jpg 300w, https:\/\/gaming-awards.com\/NEWS\/wp-content\/uploads\/2015\/10\/Studio-City-opening.jpg 1024w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>A global report on the casino industry produced this month by the credit ratings house has suggested that Macau casino resort Studio City may be \u201clikely to fail\u201d its first financial tests concerning its borrowings relative to its earnings.<\/p>\n<p>The analysis in the report has been provided by Fitch Ratings Inc. Alex Bumazhny, Fitch\u2019s Senior Director for Gaming, Lodging and Leisure said: \u201cAt current run rate, Studio City is on track to generate US$100 million of EBITDA (earnings before interest, taxation, depreciation and amortisation) and burn about US$85 million in cash per year; and is likely to fail its first leveraged based financial tests.\u201d<\/p>\n<p>Studio City opened in 2015 at a cost of US$3.2 billion and without any VIP gaming rooms. It was given an allocation of 250 new-to-market tables under the Macau government\u2019s table cap.<\/p>\n<p>The report adds that Asian casino developer Melco Crown Entertainment Ltd, led by entrepreneur Lawrence Ho Yau Lung (who own 60 percent of Studio City) may seek to increase equity holding in the project.<\/p>\n<p>Mr Bumazhny said: \u201cStudio City has up to two equity cures but the cures are capped at 30 percent of EBITDA or cash flow needed [in order] to be in compliance with the respective covenant (about US$70 million for the first total leverage test), which may not be enough.\u201d<\/p>\n<p>He continued: \u201cWhile there are many plausible scenarios, Fitch believes that more likely outcome is MPEL (Melco Crown) increasing its stake in Studio City. New Cotai (LLC), a 40 percent equity owner in Studio City with US$628 million of debt outstanding, is unlikely to contribute pro rata equity to bail out Studio City. In an event of a default at either new Cotai or Studio City, MPEL would be a logical, strategic bidder for the equity issued to the creditors in question. Studio City\u2019s performance would likely be optimised if it were wholly owned by MPEL due to the greater flexibility in marketing and table allocation.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A global report on the casino industry produced this month by the credit ratings house has suggested that Macau casino resort Studio City may be \u201clikely to fail\u201d its first financial tests concerning its borrowings relative to its earnings. The analysis in the report has been provided by Fitch Ratings Inc. Alex Bumazhny, Fitch\u2019s Senior [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":27609,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,11,8,7],"tags":[],"class_list":["post-30052","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gaming","category-headlines","category-latest","category-macau"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Analyst forecasts Studio City\u2019s position in the Macau Market - iGaming Post<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gaming-awards.com\/NEWS\/analyst-forecasts-studio-citys-position-in-the-macau-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analyst forecasts Studio City\u2019s position in the Macau Market - iGaming Post\" \/>\n<meta property=\"og:description\" content=\"A global report on the casino industry produced this month by the credit ratings house has suggested that Macau casino resort Studio City may be \u201clikely to fail\u201d its first financial tests concerning its borrowings relative to its earnings. 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