The credit rating agency Fitch Ratings recently revised the Seminole Tribe of Florida’s outlook rating from Stable to Negative, reflecting the adverse impact of the Covid-19 virus on the gaming industry and, to a lesser extent, the restaurant and leisure industries. Currently all of the tribe’s Florida casinos are closed, with no timeline for reopening.
However, Fitch noted the Seminole Tribe’s conservative leverage and ample liquidity will allow it to withstand current conditions. Fitch added Seminole Hard Rock Entertainment, also experiencing similar operational disruptions at its cafes, hotels and casinos, also has sufficient cash on hand to weather the near-term cash situation without requiring additional liquidity.
The tribe’s cash reserves are high and the gaming division should be able to maintain consistent distributions to tribal members, Fitch noted.
The Seminoles’ rating outlook could revert to Stable when the extent and duration of the impact on the gaming industry becomes clearer, Fitch stated. However, a downgrade could result if the timeline for deleveraging becomes more unclear and the impact becomes more severe than currently forecasted.
