Proposed divestment of non-gaming assets at Empire Resorts Inc’s upstate New York property Resorts World Catskills (pictured) in the United States “supports deleveraging” of the ultimate parent, Malaysia’s Genting Bhd, but the latter’s leveraging is “still high”. That is according to a Tuesday note from Moody’s Ratings Inc.
“Despite the deleveraging that may result from this transaction, Genting Bhd’s metrics remain stretched,” said Moody’s.
A Genting Bhd unit, global casino operator Genting Malaysia Bhd, is controller of loss-making U.S.-based casino business Empire Resorts.
Genting Malaysia said in a Friday update that Empire Resorts is to become “debt-free” via a deal that will see certain non-gaming assets at Resorts World Catskills sold off for US$525.0-million in cash. The buyer is Sullivan County Resort Facilities Local Development Corp (SCRFLDC).
The money raised will enable Empire – an entity wholly owned by Genting Malaysia – to pay off US$300-million in 7.75-percent senior unsecured notes that had been due on November 1, 2026.
From the balance of funds raised by disposal of non-gaming assets, Empire will buy 1,554.6 acres (629.1 hectares ) of land parcels from EPR Properties, a Missouri-based real estate investment trust, for US$201.3-million cash.
Moody’s observed in its Tuesday memo: “Our base case does not assume any additional investments for the 1,134.6 acres undeveloped portion of the acquired 1,554.6 acres.”
It added: “Any further capital spending on this portion of undeveloped land can delay deleveraging and result in pressure on the rating.”
“Empire and SCRFLDC are currently in the process of finalising the terms of the various agreements in relation to the transaction. We expect the transaction to close by December 2025, contingent upon SCRFLDC securing the necessary financing,” observed the ratings agency.
“The transaction is credit positive for Genting Bhd because it strengthens Empire’s capital structure by eliminating debt and interest obligations,” stated the institution. “The divested assets contributed to approximately 20 percent of Empire’s total revenue in 2024.”
Moody’s added: “Consequently, we now expect Genting Bhd’s adjusted debt/EBITDA [earnings before interest, taxation, depreciation, and amortisation] to decline to 4.4 times in 2025 from our previous forecast of 4.6 times.”
Financial research firm CreditSights Inc said in Tuesday commentary that it viewed the deal to sell the non-gaming assets at Resorts World Catskills “as a credit positive for Genting Malaysia, as it will eliminate refinancing risk for the Empire 2026 bond and improve Genting Malaysia’s pro-forma net leverage to around 4.6 times to 4.7 times,” relative to 4.9 times in the first quarter.
The institution added: “While we are admittedly surprised that Genting Malaysia did not render any direct funding support to Empire for its bond refinancing, the deal positively demonstrates the Genting group’s willingness to let its subsidiaries tackle debt refinancing needs on their own (even for a financially-struggling unit like Empire), before they consider stepping in with support.”
CreditSights, a unit of Fitch Group, added it anticipated the deal would have “a limited impact on Genting Bhd’s credit metrics”.
Maybank Investment Bank Bhd said in a Monday note that the move to divest some non-gaming assets at Empire could boost by 24 percent Genting Malaysia’s 2026 earnings.
Genting Malaysia runs Malaysia’s only casino complex Resorts World Genting, as well as casinos in the United Kingdom, Egypt and the Bahamas.
Empire Resorts operates the upstate New York casino complex Resorts World Catskills; Resorts World Hudson, a casino offering video lottery terminals; and mobile sports betting operation Resorts World Bet.
