STANDARD & POOR’S CREDIT RATING – RETAIL BONDS

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SKYCITY Entertainment Group Ltd.'s NZ$125 Million
Fixed-Rate Notes Assigned 'BBB-' Rating
April 29, 2021
MELBOURNE (S&P Global Ratings) April 30, 2021--S&P Global Ratings today assigned its 'BBB-'
long-term issue rating to SKYCITY Entertainment Group Ltd.'s (SkyCity; BBB-/Stable/--) NZ$125
million unsubordinated, unsecured, fixed-rate notes that mature on May 21, 2027. The company
will use the proceeds to pay down drawings on its bank facilities. We equalize the issue rating with
the issuer credit rating on SkyCity, given that no significant elements of subordination risk are
present in the capital structure.
SkyCity's long-term monopoly positions in its key markets, good asset quality supported by
ongoing reinvestment and effective management, and earnings resilience through traditional
economic cycles underpin its business risk profile. We view SkyCity's Auckland casino to be the
highest quality asset in its portfolio and a key driver of the group's performance. Furthermore,
SkyCity holds exclusivity licenses in Auckland until 2048, helping it to maintain its market share.
Tempering these strengths are COVID-19 related business interruptions to trading, execution risks
associated with the group's major developments in Auckland, earnings concentration in Auckland,
and the risks of operating in a heavily regulated industry.
We expect a solid recovery in SkyCity's earnings in fiscal 2021 (year ending June 30, 2021) to at
least 75% of fiscal 2019 levels, with a near-normalized earnings recovery in fiscal 2022. Fiscal
2021 EBITDA is likely to exceed fiscal 2020 levels, resulting in a S&P Global Ratings adjusted
debt-to-EBITDA ratio of less than 3x, further reducing to the mid-2x range in fiscals 2022 and
2023. This recovery will be supported by strong gaming revenue and a recovery in non-gaming
revenue, primarily at the group's Auckland and Adelaide assets. Management continues to target
a 2.5x net debt-to-EBITDA ratio as part of the company's capital allocation framework and
commitment to an investment grade rating.
Related Criteria
- General Criteria: Group Rating Methodology, July 1, 2019
- Criteria | Corporates | General: Corporate Methodology: Ratios And Adjustments, April 1, 2019
- Criteria | Corporates | General: Reflecting Subordination Risk In Corporate Issue Ratings, March
28, 2018
- General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017
- Criteria | Corporates | General: Methodology And Assumptions: Liquidity Descriptors For Global
Corporate Issuers, Dec. 16, 2014
- Criteria | Corporates | Industrials: Key Credit Factors For The Leisure And Sports Industry,
SKYCITY Entertainment Group Ltd.'s NZ$125 Million
Fixed-Rate Notes Assigned 'BBB-' Rating
April 29, 2021
PRIMARY CREDIT ANALYST
Joel Yap
Melbourne
+ 61 3 9631 2196
joel.yap
@spglobal.com
SECONDARY CONTACT
Graeme A Ferguson
Melbourne
+ 61 3 9631 2098
graeme.ferguson
@spglobal.com
www.spglobal.com/ratingsdirectApril 29, 2021 1

March 5, 2014
- General Criteria: Methodology: Industry Risk, Nov. 19, 2013
- Criteria | Corporates | General: Corporate Methodology, Nov. 19, 2013
- General Criteria: Country Risk Assessment Methodology And Assumptions, Nov. 19, 2013
- General Criteria: Methodology: Management And Governance Credit Factors For Corporate
Entities, Nov. 13, 2012
- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors,
have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such
criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings
information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating
action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search
box located in the left column.
www.spglobal.com/ratingsdirectApril 29, 2021 2
SKYCITY Entertainment Group Ltd.'s NZ$125 Million Fixed-Rate Notes Assigned 'BBB-' Rating

www.spglobal.com/ratingsdirectApril 29, 2021 3
SKYCITY Entertainment Group Ltd.'s NZ$125 Million Fixed-Rate Notes Assigned 'BBB-' Rating
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