Moody’s Ratings said on Thursday it expects Studio City’s adjusted debt-to-EBITDA ratio to improve over the next two years, supported by continued growth in Macau’s gaming market, stable market share and ongoing debt reduction efforts.
The ratings agency assigned a Ba3 rating to proposed senior secured US dollar bonds to be issued by Studio City Company Limited through Studio City Investments Limited. The rating outlook is stable.
‘The stable rating outlook reflects our expectation that the company’s financial leverage will improve further over the next 12-18 months, driven by continued earnings growth and a reduction in debt,’ Moody’s said.
According to the ratings agency, Studio City’s adjusted debt-to-EBITDA is expected to decline to around 6.3x in 2026 from 7.2x in 2025, before improving further to 5.7x in 2027. Moody’s said the projected leverage levels for 2026 and 2027 support the company’s B1 corporate family rating (CFR).
The agency added that the improvement would be driven by continued growth in Macau’s gaming market, stable market share and debt reduction efforts.
Moody’s said Studio City’s standalone credit profile reflects its established market position in Macau and focus on the mass market gaming segment. However, these strengths are offset by the company’s geographic concentration in Macau, where gross gaming revenue remains exposed to policy and regulatory changes in both Macau and mainland China, alongside relatively high financial leverage.
The agency also noted that Studio City’s B1 CFR reflects both the company’s standalone credit quality and the likelihood of extraordinary support from parent company Melco Resorts & Entertainment.
The proceeds from the proposed bond issuance will be used to refinance outstanding secured notes due in 2027, alongside potential drawdowns from revolving credit facilities and available cash if needed.
