Article – Businesswire
March 31 (BusinessWire) – Sky City Entertainment Group Ltd., New Zealand’s biggest casino company, had the outlook on its BBB- credit rating raised to ‘positive’ from ‘stable’ by Standard & Poor’s, reflecting its more conservative approach …
Sky City Entertainment’s credit rating outlook raised to ‘positive’ by S&P
March 31 (BusinessWire) – Sky City Entertainment Group Ltd., New Zealand’s biggest casino company, had the outlook on its BBB- credit rating raised to ‘positive’ from ‘stable’ by Standard & Poor’s, reflecting its more conservative approach to credit risks.
The rating was affirmed today, S&P said in a statement. The announcement comes after S&P completed a review of the casino company.
The company raised about $230 million selling shares last year and booked a $10 million gain from the sale of its cinema business, giving Sky City more room to repay debt. S&P credit analyst Jennifer Wee said the equity raising and asset sale “have significantly improved the group’s balance sheet and debt profile.”
Sky City is also “effectively executing its business strategy, which includes maximizing the operating performance of its existing casino assets and prudently managing capital expenditure,” Wee said.
The improved outlook means Sky City’s credit rating could be raised to BBB in the next 12-to-18 months so long as business prospects don’t worsen. The company can probably achieve its target of managing gearing at the lower end of its range of 2x to 2.5x.
“We anticipate that future potential capital projects will be accommodated within the target parameters,” she said.
Shares of Sky City rose 0.6% to $3.22 today.