Studio City's debt reduction through the recent IPO, diminishes downside risk, though overall debt leverage remains high. Our debt leverage forecast for 2019 could decline if Studio City uses additional equity financing for Studio City Phase II construction. We are affirming our 'BB-' issuer credit rating on Studio City and 'BB-' issue rating on the company's outstanding senior secured notes. We are also assigning our 'B+' issue rating to the company's proposed guaranteed senior unsecured notes. The stable outlook balances Studio City's stable EBITDA growth against the roughly US$1.4 billion of capital expenditures needed to complete Phase II. On Jan. 22, 2019, S&P Global Ratings affirmed its 'BB-' issuer credit rating on the Macau-based casino operator, Studio City Co. Ltd.
