Moody’s Ratings has revised its outlook on SJM Holdings to negative, citing heavy debt and doubts around its ability to retain satellite casino-goers as its nine satellite venues prepare to shut by year’s end, Inside Asian Gaming (IAG) reports.
The agency affirmed SJM’s Ba3 corporate family rating and B1 backed senior unsecured bond rating but warned leverage would stay “elevated” for at least the next 12 to 18 months following weaker-than-expected first-half results.
SJM reported a 5 percent drop in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the first half of 2025, weighed down by low win rates and higher costs. Moody’s now projects debt-to-EBITDA leverage at 7.3 times for the year, IAG says.
Stephanie Lau, Moody’s vice president and senior credit officer, noted “There is uncertainty around customer retention or the extent of earnings generation from the satellite table reallocation, and the likelihood of higher debt incurrence to fund satellite casino acquisitions.”
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The concessionaire plans to close at least seven of its nine satellite casinos but hopes to fully acquire two – L’Arc and Ponte 16 – while transferring gaming tables from shuttered venues to its wholly owned properties, including an expanded space at Hotel Lisboa. The closures are the result of amendments to Macao’s gaming law.
If successful, Moody’s expects SJM’s leverage to improve to 5.7 times in 2026, supported by higher earnings from table reallocations, continued gaming revenue growth, stronger performance at Grand Lisboa Palace and more stable win rates.
Lau said that higher earnings would be “mainly supported by the reallocation of satellite casino tables to SJM’s existing self-owned properties,” while other factors could include “continued moderate growth in gaming revenue, a further ramp-up of Grand Lisboa Palace and a normalisation of the win rates.”
The term “satellite casino” refers to a business under the licence of one of Macao’s six gaming concessionaires but operated by third parties within premises not owned by the concessionaire. These casinos have historically functioned under a partnership model, where revenue is shared between the concessionaire and the third-party operator.
