Moody's Q & A: Significant Las Vegas decline for coming quarters; improvements in 2021

June 5, 2020

Senior analyst from bond credit rating company predicts short-term struggle but has more optimism for 2021.

Adam McLaren, VP, senior analyst at Moody’s Investor Service, expects Las Vegas operators to see a “pretty significant” decline in the next couple of quarters.

With Moody’s, the bond credit rating agency, already projecting a tough recovery for the gaming sector, Gaming America caught up with McLaren to delve into the short-term impact on firms coming out of the COVID-19 pandemic.

McLaren told Gaming America: “What we’ve tried to lay out is, clearly in the next 12 months, we think it’s still going to have results significantly below 2019 – which is the baseline of a normalised year.

“There will be a pretty significant decline in the next couple of quarters. The recovery is taking effect; half of US casinos are reopened as of today.

“But our view is, at least right now, there’s a lot of uncertainty over the health of a consumer, consideration to social distancing and unemployment.”

McLaren, however, does have more hope for 2021. With Moody’s projecting EBITDA levels falling 70% for 2020, the analyst sees this number only falling 30% below 2019 levels in 2021.

“In 2021, we’re looking at potentially 30% below 2019 levels; that’s a pretty good indication providing there is no second wave of the virus," he explained.

“It’s a significant improvement from an unprecedented operating environment.

“If companies are 30% down from 2019, you have to consider 2019 was a pretty strong year. So there will be recovery – it will just take a bit longer.”


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