Cambodia casino operator Nagakov's public offer to repurchase up to $120 million in principal out of its $541.7 million senior bonds due in July 2024 is not a "suffered exchange" but risks of refinancing remain for the company, Moody's Investors Service Inc said in a note.

The move to repurchase up to 22% of Hong Kong-listed Naga Corp's outstanding bonds will be financed by its own cash, the gaming industry said in a filing on Friday.

Nagakov holds exclusive rights to a long-lived casino in Phnom Penh, the Cambodian capital that runs the nagaworld casino complex.

Moody's analysts Yu Sheng-tai, Yi Ying-chin, Jacintapo and Vikas Harlan said in a commentary released the same day, "There may be economic losses depending on the liquidation price, but we see the deal as opportunistic rather than a distressed exchange because there is no clear default avoidance."

The agency said casino operators were still exposed to the risk of refinancing on the balance of $421.7 million in notes, assuming investors were bidding for the maximum value of the notes through the event. This was because Nagakov's 2022 and 2023 operating results were expected to be "much lower" than its 2019 pre-pandemic trading performance, the agency said.

"Nagakov's operating performance is recovering after last year's [COVID-19] pandemic-related setbacks," Moody's Team said. "However, we expect EBITDA [earnings before interest, taxation, depreciation and amortization] for 2022 and 2023 to be 38% and 52%, respectively, significantly lower than in 2019."

"As a result, we anticipate that the company will need external financing to repay outstanding bonds," it added

However, with the economic environment dominating, "tight financing conditions" could cause casino operators to struggle in that regard, Moody's observed.

"At the same time, Nagakov has limited sources of liquidity due to a lack of banking facilities and the inability to sell non-core assets," analysts at Naga Corp wrote.

BY: 카지노

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