Moody's said casino developer and operator Nagakov's "B2" corporate family rating had "increased risk of borrowing" for the Hong Kong-listed company. Its "B2" senior unsecured rating on the company's U.S. dollar bonds was also listed for review, the ratings agency said in a report on Thursday.

Nagakov holds a long-lived exclusive casino license in Phnom Penh, the Cambodian capital, which operates the Nagaworld resort complex.

"The rating review reflects the possibility of a downgrade if Nagakov fails to make substantial progress over the next three months to refinance $472 million of outstanding bonds due in July 2024," Moody's analyst Yu Sheng-tai said, as cited in the report.

The rating agency said Nagakov "is expected to have an increased borrowing risk" given the July 2024 deadline and "tight financing conditions."

"This bond is the company's only debt in its capital structure, excluding rental debt. Nagakov also has limited sources of liquidity given its banking facilities and divisible non-core assets," Moody's said.

Despite Naga Corp's expected earnings improvement, Moody's believes casino operators will "likely rely on outside funds to repay their bonds." As of Dec. 31, the company had $175 million in cash and deposits.

"It is inadequate to cover the company's cash use, including bond maturities and discretionary expenditures such as dividends and development capital expenditures, with estimated operating cash flow of approximately $535 million through June 2024," Moody's said.

Nagakov has "flexibility to significantly reduce or defer discretionary spending to strengthen liquidity and repay bonds through internal cash flow," the agency noted.