Gaming Bonds Improve

21.07.2003, Lesen Sie hier den Bericht über «Gaming Bonds Improve».

Returns from gaming industry bonds improved substantially in the second quarter compared with the previous quarter and the same period of 2002 but continued trailing other investment vehicles with similar risk levels.

Gaming bonds trailed other sectors of the bond market in the first half, following a market-leading 2002. But they were catching up as the second quarter drew to a close. "Gaming has a great record because of its resilience after 9-11, strong cash flow, manageable leverage levels and very few defaults as a sector," said Banc of America Investments analyst Andrew Susser.

The Deutsche Bank index for gaming industry grade B bonds in the second quarter was 5.79 percent, up from 2.21 percent in the first quarter and from 1.63 percent in the second quarter of 2002. The index for gaming bonds in the second quarter trailed U.S. Treasury-issued grade B bonds, with a yield of 9.04 percent in the second quarter and 7.52 percent in the first quarter.

Also by comparison, investments in gaming stocks included in the Dow Jones casino index and the Standard and Poor's 500 index gave investors an average return of 25 percent and 13.75 percent respectively in the second quarter.

Still, analysts said investments in gaming bonds were attractive because of the low risk involved and the stability of returns. "If you invested in gaming bonds, you had solid, steady returns last year and this year to date with very little volatility," said Deutsche Bank analyst Andrew Zarnett.

Analysts cited a variety of factors in the general bond recovery in the second quarter, including the victory in the war with Iraq, passage of President Bush's historic tax cut on capital gains and dividends, rising stock prices and tumbling interest rates. "When you're seeing nearly a 100 percent increase in gaming sector yields, that's a strong indication of recovery and increased expectations," said Brian Gordon, spokesman for Applied Analysis, a Las Vegas-based financial consulting company.

Further, Wall Street was optimistic about gaming bonds for the remainder of 2003 because the bond market is at "an inflection point with respect to the relative view between the gaming and lodging sectors," Zarnett said, with lodging overpriced and gaming fundamentals recovering.

On the sector in general, Susser said while predictions are difficult, "if you look at spreads compared to the broad market, it looks as if there's still room for improvement (in the relative performance of gaming bond)."

Deutsche Bank is particularly positive about prospects for casinos, over the remainder of 2003. "As a result of strong demand in the gaming sector we expect gaming companies in general to generate solid free cash flow and to reduce debt levels in 2003 to the tune of $604 million," Zarnett said. "In sharp contrast, the lodging companies continue to experience weak demand levels which has been compounded by a mix change and the impact of third-party (Internet) discount pricing," Zarnett said.

The lodging industry is only expected to generate free cash flow and reduce debt levels in 2003 by $385 million, Zarnett said.

Generally, mutual funds, insurance companies and pension funds, rather than individuals, invest in the bond market because the incremental units come in denominations of $1,000 so the average price is significantly higher than a unit of stock, he said.

However, individuals invest in the bond market, including gaming bonds, through investments in mutual funds, Zarnett said. Companies offering mutual funds invested in gaming bonds include American General Financial Services, Federated Investors, Merrill Lynch, Prudential and Putnam Investments, industry sources said.

Über Glücksspiele Las Vegas - Gambling in Las Vegas:

Las Vegas liegt im Westen der USA im Bundesstaat Nevada und ist das Glücksspiel-Paradies von Amerika.

Las Vegas hat rund 100 Spielcasinos. Im Bundesstaat Nevada sind sogar über 300 Spielcasinos registriert. Die grössten Casinos sind das Bellagio, Caesars Palace, Venetian / Palazzo, Wynn / Encore, MGM Grand, Mandalay Bay.

Weitere bekannte Casinos sind das Mirage, frühere Heimat von Siegfried und Roy, das Luxor in Form einer Pyramide oder das Casino Rio All-Suite Hotel and Casino, in welchem jährlich die Pokerweltmeisterschaft (World Series of Poker WSOP) durchgeführt wird.

Die bekanntesten zwei Strassen sind der Las Vegas Boulevard, welcher auch als Las Vegas Strip bezeichnet wird. Daneben ist die Fremont Street eine gut besuchte Casino-Meile, wo beispielsweise das legendäre Casino Binion's (vormals Binion's Horseshoe) seine Spiele anbietet.

Las Vegas erstreckt sich über eine Fläche von 340 km2 und hat rund 650'000 Einwohner.

--- Ende Artikel / Pressemitteilung Gaming Bonds Improve ---


Weitere Informationen und Links:

Weitere Nachrichten der Gaming-Branche