Bulletin: SKYCITY Resilient Amid Coronavirus Outbreak And NZICC Fire

MELBOURNE (S&P Global Ratings) Feb. 13, 2020--S&P Global Ratings today said that it expects New Zealand-based SKYCITY Entertainment Group Ltd. (SKC, BBB-/Stable/--) to be resilient through a series of one-off events, including the new coronavirus outbreak and fire at the New Zealand International Convention Centre (NZICC). That said, lower forecast earnings during a period of elevated development activity is likely to reduce the company's rating headroom at the 'BBB-' level. SkyCity has built a significant ratings buffer over the past few years. However, we forecast the company's debt-to-EBITDA ratio to operate in the mid-2x range over the next 12 months, increasing from 2.0x for the year ended June 30, 2019. This leaves SkyCity with less headroom against our downward rating

...February 12, 2020 MELBOURNE (S&P Global Ratings) Feb. 13, 2020--S&P Global Ratings today said that it expects New Zealand-based SKYCITY Entertainment Group Ltd. (SKC, ###-/Stable/--) to be resilient through a series of one-off events, including the new coronavirus outbreak and fire at the New Zealand International Convention Centre (NZICC). That said, lower forecast earnings during a period of elevated development activity is likely to reduce the company's rating headroom at the '###-' level. SkyCity has built a significant ratings buffer over the past few years. However, we forecast the company's debt-to-EBITDA ratio to operate in the mid-2x range over the next 12 months, increasing from 2.0x for the year ended June 30, 2019. This leaves SkyCity with less headroom against our downward rating threshold of 3.0x. The higher leverage is attributable to a softer earnings outlook. We expect insurance proceeds to largely offset SkyCity's NZICC capital expenditure funding requirement, although...

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