Melco Resorts (Macau) Ltd.

Our ratings on MRM have been on CreditWatch with negative implications since Feb. 6, 2020, amid the uncertainty surrounding the duration of COVID-19-related restrictions that have battered Macau's gaming and tourism industries (see "Melco Resorts And Studio City Ratings Remain On CreditWatch Negative Amid Continued Travel Restrictions," published April 20, 2020, on RatingsDirect). We aim to resolve the CreditWatch status when we have more information on the extent and impact of COVID-19. If the pandemic is not contained and if we believe travel restrictions will extend well into the third quarter, we may lower the ratings. That will also likely mean MLCO won't be able to reduce its debt leverage to 3.5x by 2021. China's real GDP to grow 1.2%

...The Macau gaming industry to gradually recover after facing an unprecedented decline in visitors and gaming revenue due to travel restrictions, contagion fears, and weak consumer sentiment. Macau's gross gaming revenue (GGR) declined by 80% year on year in the first seven months of 2020, despite the reopening of casinos on Feb. 20, 2020. Macau's casinos could recover in the fourth quarter of the year, supported by the gradual easing of travel restrictions as COVID-19 cases have stabilized at a low number in Macau and mainland China. Year-on-year growth in GGR will likely be strong in 2021, but it may still be 10%-20% below 2019 levels....

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