Macau gaming bonds under pressure due to US-China trade war: CreditSights
The announcement of sweeping new tariffs by Unites States President Donald Trump has spurred uncertainty and rattled global markets, with Macau gaming bonds being no exception. Gaming bonds in the city have come under pressure, notably leading to a widening in bonds spreads across both investment-grade and high-yield issuers in the sector.
According to CreditSights, between 2-4 April, the spreads on investment-grade Macau gaming bonds—like those issued by Sands China—widened by up to 25 basis points. High-yield bonds did not fare much better, with spreads widening by as much as 77 basis points. By the following week, bonds from Sands China saw spreads widen further by 76 to 137 basis points. For high-yield issuers, spreads jumped between 110 to 258 basis points. Notably, this trend excludes bonds maturing in 2025, which saw slightly different patterns due to short-term maturity benefits.
Discussing broader impacts, analysts see the gaming sector in Macau being primarily domestically oriented, with 73 percent of visitors in February 2025 coming from mainland China. The combination of Trump’s tariffs and his controversial “Liberation Day” remarks added to the uncertainty stew. CreditSights believes the market reaction is not just about the gaming sector—it reflects larger concerns around geopolitical instability and weakened global sentiment.
Stable outlook for the sector’s fundamentals
Despite the turmoil, CreditSights isn’t sounding the alarm just yet and has maintained its stable outlook for the sector’s fundamentals. The firm has forecasted China’s gross domestic product (GDP) to grow at 4.7 percent in 2025—which is still above the consensus of 4.5 percent. However, CreditSights has marked that the downside risks to this outlook have heightened amid the broader global economic slowdown.
Last week, casinos across Asia were impacted by the tariffs imposed by the US, with several Hong Kong-listed operators hitting multi-year lows on the Hong Kong Stock Exchange (HKEX) on 7 April 2025 (Monday). The casino stocks plunging was part of a broader Hang Seng sell off, largely driven by the tariff war between the two countries. Hong Kong’s main stock market index, the Hang Seng Index (HSI), fell by over 13 percent on Monday—the steepest decline since the 1997 Asian financial crisis. Among casino stocks, Galaxy Entertainment Group experienced one of the most significant daily losses, with its share price falling over 12 percent to close at HK$26.40, down from HK$30.15 earlier in that week.
