Star confident of meeting financial liabilities after lenders agree latest covenant waiver

Australia’s Star Entertainment Group has flagged optimism about fulfilling its financial obligations now that its lenders have granted a waiver on covenant tests under its syndicated loan agreement. According to a Reuters report, Star announced a covenant waiver for the September 30 test, subject to finalising documentation, which relieves some immediate pressure to satisfy restrictive debt conditions. This development follows months of tense negotiations in which Star struggled to gain favour with creditors over the terms proposed for waiver eligibility.

Leading up to this turnaround, Star had rejected earlier waiver proposals, criticizing the lender terms as unacceptable. The dispute centered around a A$430 million (US$) loan facility, where lenders sought steep fees or terms that Star deemed too onerous. Without relief, the company risked breaching covenant thresholds and being forced into rapid debt repayments that would stress liquidity. 

With the waiver in hand, Star’s management sees a clearer path to meeting its immediate liabilities, especially while it works to finalise its audited financial statements for the 2025 fiscal year. The waiver helps avert a technical default and gives Star breathing room to navigate its capital structure. Still, the company’s longer-term stability hinges on further debt restructuring, cost control and stabilising revenues amid regulatory and market headwinds. 

While the latest waiver marks a meaningful respite, Star remains under pressure. Its lenders, which reportedly include Deutsche Bank, Macquarie and Washington H Soul Pattinson, have shown increasing reluctance to continue rolling over concessions without stricter terms. The company’s ability to regain financial footing will depend greatly on how it addresses shareholder confidence, compliance demands, and the evolving landscape of casino regulation in Australia.