Ratings agency Moody’s has affirmed its ratings for companies in the Melco group, noting that their outlook is stable.
According to a release, Melco Resorts Finance (MRF) maintains its Ba3 corporate family rating and senior unsecured ratings. Studio City Finance Limited’s B1 CFR and senior unsecured ratings were also confirmed, as well as the Ba3 backed rating on the USD senior secured bonds issued by Studio City Company (wholly owned by Studio City).
All of the ratings ‘are stable’.
Moody’s Ratings Vice President and Senior Credit Officer Stephanie Lau indicates that the affirmation and stable outlook for the Melco group companies “reflect our expectation that their financial leverage will gradually improve over the next 12-18 months, underpinned by continued growth in Macao’s overall gaming revenues and their strengthening market position”.
The companies are subsidiaries of Melco Resorts & Entertainment (MRE).
Moody’s indicates that it expects MRE’s revenue ‘to increase by about 14 percent in 2025 compared to 2024, driven by steady increases in Macau’s […] gross gaming revenues and maintenance of solid market share’.
The group highlights that MRE saw 13 percent revenue growth in 1H25, while overall Macau GGR increased by 4 percent in the same period.
Moody’s ‘project its revenue will continue to rise in 2026, though the pace of growth will be more moderate compared to the prior year’.
Looking to Studio City, expectations are for 13 percent growth in revenue in FY25, with 5 percent growth in 2026.
Adjusted EBITDA for MRE is anticipated to ‘improve to around $1.3 billion in 2026 from $1.1 billion in 2024’. Studio City’s is expected to rise to $0.3 billion in 2026, from $0.2 billion in 2024.
‘This will be largely driven by higher gaming volumes and revenues across its mass and premium mass segments, as well as steady profitability and market shares’.
Moody’s further indicated that ‘The Ba3 ratings also consider MRE’s very good liquidity, underpinned by its combined cash and unused revolving credit facility of $2.2 billion (excluding restricted cash) as of the end of June 2025. These resources and operating cash flows will be sufficient to cover the company’s capital spending and debt repayments for the next 12-18 months’.
Analysts previously indicated that Melco was ‘doing all the right things’ as its second quarter revenue rose to $1.13 billion and adjusted EBITDA increased 25 percent to $124.7 million. However, this was based on Melco’s Macau operations – as Melco International Development aims to divest its interest in City of Dreams Manila even as it begins to ramp up City of Dreams Sri Lanka.
