Fitch Ratings placed Universal Entertainment’s credit rating on “rating watch negative,” keeping its ‘B-’ long-term issuer default rating (IDR) and U.S. dollar senior secured notes under pressure. This move follows the looming maturity of US$760 million debt due December 2024, which makes up most of Universal’s obligations.
Universal Entertainment, which controls Tiger Resort, Leisure and Entertainment Inc (operator of Okada Manila), faces refinancing challenges despite progress. Fitch noted the company lacks legally binding refinancing commitments and warned that delays could cause further downgrades.
Fitch said, “We will resolve the rating watch negative if Universal successfully refinances its debt. Delays will likely lead to negative action.”
While Fitch expects full recovery of Universal’s debt, it highlighted that most enterprise value ties to Philippine assets, applying the country cap and assigning a recovery rating of ‘RR4’.
Okada Manila reported JPY20.38 billion (US$132.2 million) in Q1 net sales, 59.2% of Universal’s total consolidated sales. However, Okada Manila’s gross gaming revenue (GGR) fell 24.1% year-on-year. Fitch projects softer growth this year, with overall revenue flattening in 2024 before modest recovery in 2025. The outlook remains positive due to strong economic growth and tourism rebound.
Universal’s Q1 net sales dropped 3.0% to JPY34.43 billion, and operating profit declined 15.5% to JPY4.02 billion. Yet net income rose 17.1% to JPY3.45 billion. The company saw strong sales of “smart pachislot” machines in Japan, while its integrated resort business struggled amid weaker junket activity.
Favorable foreign exchange movements—due to a weak yen and strong U.S. dollar—boosted income, especially from dollar-denominated bonds.
As Universal approaches its refinancing deadline, Fitch keeps the Universal Entertainment credit rating under close watch, with refinancing success critical to its future financial health.
