Fitch Ratings has changed the outlook on SJM Holdings' (HKG:0880) BB- long-term foreign currency issuer default rating to negative from stable, while affirming its ratings, according to a Friday release.

The negative outlook stems from increased risk around the Hong Kong-based company's deleveraging efforts, as seen in its weakening EBITDA and cash flow contribution from the Grand Lisboa Palace (GLP) resort.

Fitch sees some lingering uncertainty over increased efforts for GLP and the impct of its satellite casino closures and restructuring.

The rating agency still sees the company's leverage numbers recovering, although it warned that continued operational slowdown could prompt negative rating actions.

Fitch sees EBITDA's leverage rising to above 8x in 2025 from 7x in 2024, before declining to under 5x in 2027.

Notable shifts in the company's leverage levels or market share following the satellite casino's restructuring could prompt future rating actions, Fitch said.