Moody’s Ratings on Monday lowered the rating of Malaysia-listed conglomerate Genting Bhd to ‘Baa3’ from ‘Baa2’, with a ‘stable’ outlook, citing increased debt and slower earnings recovery for the group.
The rating of Genting Overseas Holdings Ltd, which is the holding entity for the parent’s stake in Genting Singapore Ltd, was also cut by one notch to ‘Baa3’.
Genting Singapore Ltd, operator of Resorts World Sentosa in Singapore, was downgraded to ‘Baa1’ from ‘A3’, also with a ‘stable’ outlook.
The downgrades were announced after Moody’s placed the group on review in October due to what it said were constraints regarding Genting Bhd’s “weaker credit quality”.
Credit and market research provider CreditSights Inc said last week that Genting Bhd and Genting Malaysia were also facing downgrade risk by Fitch Ratings, citing the group’s elevated debt levels and strained cash flow position.
Moody’s said in its Monday report: “The ratings downgrade reflects Genting’s [Bhd’s] already weak position due to prolonged deleveraging amid slower than expected earnings recovery, further strained by increased debt to fund its takeover offer for Genting Malaysia and expected spending following the potential award of a downstate New York City commercial casino licence.”
The institution added: “The stable outlook reflects our expectation that earnings will continue to improve at Genting’s operations in Singapore and Las Vegas, that execution risk for its downstate New York City project remains minimal such that the project will be earnings accretive by the second half of 2026, supporting a recovery in credit metrics, and that the group will not undertake any additional debt-funded expansion projects.”
Genting Bhd has moved closer to the 75.0 percent share-ownership threshold that might permit it to take private Genting Malaysia Bhd, the unit that runs the Resorts World Genting casino resort in Malaysia.
On Thursday, Genting Bhd increased its stake in Genting Malaysia – via open-market purchases – to just under 73.80 percent, from the 73.13 percent achieved at the time the parent’s takeover offer closed on December 1.
Separately, a unit of Genting Malaysia, Genting New York LLC, has been recommended to receive a downstate New York casino licence in the United States.
Genting New York’s proposal entails a US$5.5 billion expansion up to 2030, and a US$600 million upfront licence fee, in exchange for a 30-year licence.
Genting Bhd’s standalone liquidity is “excellent,” supported by fees and dividend income from its operating subsidiaries, observed Moody’s.
“However, Genting’s debt maturity wall will build in 2027 when the US$1.5 billion notes” under one of its units “are due for repayment in January 2027,” noted the rating agency.
That will be followed by the repayment of the group’s other borrowings “in March 2027 and June 2027 respectively,” Moody’s said.
“We expect Genting will need to refinance at least a portion of that debt maturity over the next six to 12 months,” it added.
Last week, Genting Bhd said one of its subsidiaries filed for the establishment of an unrated medium term notes programme worth MYR5.00 billion (US$1.21 billion).
The proceeds from this new programme will be used for the group’s operating expenses, refinancing of borrowings, investment and capital expenditure, working capital requirement, funding requirements, and other general corporate purposes, stated the parent.
In a separate filing on Thursday, Genting Bhd said one of its units has issued MYR1.35 billion in one-year notes. The exercise was done by Genting RMTN Bhd, under the group’s MYR10.0-billion medium-term notes programme.
