Low Credit Rating May Force a $175m Repayment on Crown Resort
Casino empire, Crown Resorts owned by James Packer, may be forced to repay above $175 million if credit ratings continue to drop. The group is resorting to the sale of its Sydney’s Harbour Barangaroo development apartments to clear off some debt load while awaiting a final report of its affairs by the New South Wales government soon.
In late November, rating agency Moody cut down Crown’s score to Baa3, which was a little above junk. The rating agency has also hinted that it might further cut it down because of the NSW Independent Liquor and Gaming Authority (ILGA) delay in deciding on the opening of Barangaroo casino’s gaming floor before the inquiry reports availability. The implication is that a below investment grade or junk rating would have made it more expensive and difficult for Crown Resorts to borrow money.
The casino company obtained a $450 million loan last year to complete its project’s construction but has drawn only $220 million from the facility for loan repayment by the end of the year. Crown Resorts has banned offshore junket operators as part of measures to avoid regulatory actions. The Casino company had planned to open the Barangaroo gaming floor before Christmas; however, it was forced to postpone it until 1st February. This delay was to enable the former judge handling the inquiry, Patricia Bergin, to submit her report to the ILGA.
However, Moody stated that Crown’s future lies in the action NSW government decides to take after receiving Bergin’s report, which may range from large fines to license loss.
ILGA’s review may also necessitate regulators in other areas of Crown operations, such as Western Australia and Victoria, to commence their own assessments, which may negatively affect Crown Resort’s business in those states.