Bond Investors Double Down on Macau Casino Debt

Bond investors from Asia and beyond are taking the risk and doubling down on investments in Macau casino debt. This move carries certain uncertainties but has the potential to be more lucrative than investments in corporate debt. At the moment, investing in Macau casino debt might be less risky than investing in shares too.

The debt issued by Macau’s gambling and entertainment companies is now even more tempting to investors amid the recovering gross gaming revenue. The special administrative region had struggled with the pandemic and China’s Zero-COVID policy for a while but is finally showing signs of recovery.

The rebounding gross gaming revenues have attracted the attention of a number of investors and consultancies who believe that the region’s future is bright.

Bonds May Be Securer Than Shares

In addition, the share prices of Macau’s six concessionaires are yet to rebound to pre-pandemic levels. In fact, most companies’ stock continues to fluctuate or even decline. While some experts believe that the Macau stocks deserve better, considering their strong recovery, investing in shares at the moment seems risky. Amid the stock-related uncertainties, investing in bonds seems to be somewhat safer for investors.

Furthermore, the trust in Macau casino bonds has led to Sands China’s bonds getting lifted to investment grade by S&P. Melco, on the other hand, just had its credit rating upgraded to stable, further confirming that investing in bonds might be the way to go.

Many investors may also be interested in a number of other boons provided by the Macau casino operator bond, including Asia’s low default rates and the departure of many Chinese firms from the bond market, which has decreased the overall supply.

In other news, five concessionaires that previously sought compensation from Suncity Group and Alvin Chau have now dropped their claims. This decision followed Chau’s imprisonment in October when the Court of Second Instance in Macau handed the junket mogul an 18-year sentence.

For reference, Chau and his junket were involved in a number of illicit activities, including fraud, criminal association, money laundering and illegal gaming.