Moody’s downgrades SJM Holdings and revises outlook

The ratings agency expects gradual earnings growth and improving leverage, supported by Casino L’Arc contributions and table reallocations.

Macau.- Moody’s Ratings has downgraded the corporate family rating (CFR) of SJM Holdings one step from Ba3 to B1, while revising the company’s outlook from to stable. It cited expectations that earnings recovery will remain gradual over the next 12 to 18 months.

The agency also downgraded the backed senior unsecured ratings on bonds issued by Champion Path Holdings Limited and SJM International Limited, both guaranteed by SJM, from B1 to B2. According to Moody’s, the downgrade reflects expectations that the operator’s financial leverage, although improving, will remain elevated in the near term.

Moody’s expects SJM’s adjusted debt-to-EBITDA ratio to improve to around 7.3x in 2026 from 9.0x in 2025, before declining to approximately 6.3x in 2027. The improvement is expected to be driven primarily by EBITDA growth, combined with moderate debt reduction.

The ratings agency expects adjusted EBITDA to increase from HK$3.4bn (US$434m) in 2025 to HK$4.1bn (US$524m) in 2026 and HK$4.5bn (US$575m) in 2027. The projected growth reflects contributions from Casino L’Arc following its acquisition in December 2025, as well as gradual earnings gains from gaming tables reallocated from former satellite casinos.

Moody’s said earnings performance at Grand Lisboa Palace and Grand Lisboa is expected to remain subdued, broadly in line with first-quarter 2026 results. Despite the downgrade, Moody’s described SJM’s liquidity position as “good”, highlighting cash holdings of HK$2bn, excluding restricted cash, alongside available revolving credit facilities that are expected to sufficiently cover committed capital expenditure and debt maturities over the next 12 to 18 months.

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See also: Moody’s revises Macau outlook

The ratings agency expects gradual earnings growth and improving leverage, supported by Casino L’Arc contributions and table reallocations. Macau.- Moody’s Ratings has downgraded the corporate family rating (CFR) of SJM Holdings one step from Ba3 to B1, while revising the company’s outlook from to stable. It cited expectations that earnings recovery will remain gradual over…