Genting New York LLC, which said it plans to invest up to US$5 billion if it gets one of the three likely downstate New York casino licences, has priced an offer of US$525 million in senior unsecured notes due in 2029, at 7.250 percent.
The offer, made jointly with Genting New York Capital Inc, is to “refinance existing indebtedness,” said a Wednesday filing to Bursa Malaysia by Genting Malaysia Bhd. The issuers are indirect wholly-owned subsidiaries of Genting Malaysia, part of Malaysian conglomerate Genting Bhd.
Wednesday’s filing added: “It is contemplated that concurrently with the issuance of the notes, Genting New York will enter into a new senior secured credit facility, which will include a US$775.0 million delayed draw term loan facility and a US$150.0 million revolving credit facility.”
Genting New York runs the current downstate gaming operation Resorts World New York City.
The US$525 million notes are only being offered to qualified institutional buyers.
The filing said S&P Global Ratings and Fitch Ratings Ltd had respectively assigned BB+ ‘stable’ and BBB- ‘negative’ ratings to the notes.
According to Fitch, the proceeds from the note offering will be used to refinance Genting New York’s “existing US$525-million senior unsecured notes due in 2026”. The company will also use part of the proceeds to “repay a US$175 million secured term loan,” said the rating agency.
Fitch placed Genting New York’s ratings on “rating watch negative” in September 2023. It said at the time that the move reflected the “risk to changes in the notching under the parent and subsidiary linkage criteria” should Genting New York “not win a full-scale casino licence in downstate New York”.
“In that case, we think Genting New York’s strategic importance to the Genting group and incentives for Genting Bhd to provide support are likely to be weaker, which could lead to Genting New York’s issuer default ratings being downgraded by more than one notch,” added the institution.
Genting Malaysia’s Wednesday update also said “approval in principle” had been received for the listing of the notes with Singapore Exchange Securities Trading Ltd.
The terms of issuance will “restrict the issuers’ ability to encumber the issuers’ assets; merge or consolidate with another company; enter into sale and lease-back transactions and transfer or sell all or substantially all of their assets – subject to a number of important exceptions”.
The filing stated that prior to October 1, 2026, the issuers may redeem up to 40 percent of the aggregate principal amount of notes issued under the indenture – including any additional notes – at a redemption price of 107.250 percent of the principal amount, plus accrued and unpaid interest, subject to certain conditions.
If Genting New York is involved in a “change of control triggering event” it must offer to repurchase the notes at a repurchase price equal to 101 percent of the principal amount of the notes repurchased, plus accrued and unpaid interest, to, but not including, the applicable repurchase date.
