Okada Manila’s operator gets ‘B+’credit rating from Fitch

Fitch Ratings gave Tokyo-based Universal Entertainment Corp., the operator of casino-resort complex Okada Manila, a “B+” credit rating with stable outlook.

The rating reflects Universal Entertainment’s “strong market position both in the casino business as the operator of the Okada Manila, the largest integrated casino resort in Manila’s Entertainment City,” Fitch said on Friday.

A B+ rating indicates the presence of material default risk, but a limited margin of safety remains, according to Fitch.

Financial commitments are being met by borrowers with a B+ rating, but the capacity for continued payment of obligations is vulnerable to deterioration in the business and economic environment, it said.

In Japan, Universal Entertainment’s pachinko and pachislot business “commands a leading market share.”

“The company ... faces headwinds in the pachinko and pachislot segment in light of the sector’s long-term decline,” Fitch said.

“A further constraint is Universal Entertainment’s corporate governance amid the ongoing dispute with its founder and former chairman Kazuo Okada,” it added.

Fitcht expects high single-digit gross gaming revenue growth for Universal Entertainment in the Philippines as a result of robust economic expansion.

“Increasing international tourist numbers are likely to boost junkets and ancillary revenue streams at high-end casinos. As the largest integrated resort in Entertainment City, Okada Manila is well-positioned to benefit from these positive dynamics,” the credit watcher said. —Ted Cordero/VDS, GMA News