November 17, 2023 3 min read


Moody’s Improves Melco’s Rating amid Strong Recovery in Macau

Melco’s credit may be lowered once again if the company’s recovery slows down

The Investors Service of the credit rating agency Moody’s has upgraded the credit rating of Melco Resorts & Entertainment, a major Asian casino company. Previously negative, the company’s rating has now been updated to Ba3, signifying its improving stability.

The update comes in the wake of the publishing of the quarterly results of Melco’s City of Dreams operator brand. The Q3 results of City of Dreams were positively impacted by the favorable conditions in the special administrative region of Macau, which continues to recover from the pandemic.

The recovery of the local market also meant an uptake in business. An uptake in the VIP segment suggests that its GGR may return to 36% of the 2019 level by 2024. The current tailwind is exactly what led Moody’s to improve Melco’s rating, Gloria Tsuen, a Moody’s vice president and senior credit officer, confirmed.

According to Tsuen, Melco’s financial leverage should improve “significantly” over the upcoming 12-18 months.

Melco Needs to Work Harder to Reach Investment-Grade Rating

Despite its favorable outlook, Melco is yet to fully recover from the effects of the pandemic and China’s Zero-COVID policy. 2022 saw the company lose a whopping $100 million and face significant business and financial challenges. However, the company is optimistic that 2023 and 2024 will be when it turns things around.

The Asian casino giant expects EBITDA to increase to $900 by the end of the current year and to $1.4 million in 2024.

Tsuen added that a factor her team considered when improving Melco’s rating was its $1.2 billion in cash, which the company can use to address its liabilities. In addition, Tsuen pointed out to Melco’s impressive Macau portfolio which poises the company for quick recovery.

However, Melco will need to demonstrate better results if its rating is to be improved further. Going beyond the serviceable Ba3 result and reaching investment grade will be a matter of bolstering the company’s EBITDA to at least 4.5x-5x.

However, the reverse is also possible, Moody’s warned, noting that Melco’s rating might be lowered if its adjusted EBITDA returns to 5.5x-6x or if the company’s liquidity weakens. These theoretical factors could potentially impede the company’s recovery and make it unable to reduce debt.

Moody’s isn’t the only agency that trusts in Melco’s ability to recover. Earlier this year, Credit Suisse raised the rating of Melco Resorts to buy, because of a variety of positive catalysts. The better-than-expected recovery in Macau was also Credit Suisse’s reason to improve Melco’s outlook.  


Although Fiona doesn't have a long-spanning background within the gambling industry, she is an incredibly skilled journalist who has built a strong interest in the constantly growing iGaming network. The team at is glad to have her on our roster to help deliver the best stories as soon as they hit. Aside from writing, she loves to dabble in online casino games such as slots and roulette, both for her own enjoyment and also as research to better improve her understanding of the industry.

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