KUALA Lumpur (Dec 8): Moody’s Ratings has downgraded the issuer ratings of Genting Bhd (KL:GENTING) and two of its subsidiaries — Genting Overseas Holdings Ltd (GOHL) and Genting Singapore Ltd (GENS) — following the group’s planned RM6.3 billion debt-funded acquisition of the remaining 50.6% stake it does not own in Genting Malaysia Bhd (KL:GENM).
In a statement on Monday, Moody’s lowered the ratings of Genting and GOHL to Baa3 from Baa2, while GENS was downgraded to Baa1 from A3, with all three entities carrying a stable outlook. The downgrade comes after Moody’s placed the group on review in October pending the outcome of the GENM acquisition.
Last week, Fitch Solutions’ unit CreditSights also flagged Genting and GenM as facing downgrade risk, citing Genting’s elevated debt levels and strained cash flow position.
"The ratings downgrade reflects Genting’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 GENM and expected spending following the potential award of a downstate New York City (NYC) commercial casino licence," said Moody’s.
“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 NYC 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,” it added.
Moody’s also downgraded the backed senior unsecured rating of notes issued by GOHL Capital Ltd — a wholly owned unit of GOHL — to Baa3 from Baa2. The notes are guaranteed by GOHL, with both GOHL and GOHL Capital supported by a Keepwell Deed involving Genting, GOHL, GOHL Capital and the trustee of the guaranteed notes.
Earlier this month, Genting secured 73.133% stake in GENM at the close of its privatisation offer, with GENM remaining listing following the takeover bid.
GENM has also been selected for a commercial casino licence in New York, with its subsidiary Genting New York LLC being chosen by the New York Gaming Facility Location Board to advance to the final licensing review stage with the New York State Gaming Commission, which is expected to issue licences by Dec 31, 2025.
Beyond capital spending at Genting New York LLC, Moody’s expects Genting to incur annual capital expenditures of RM8 billion in 2026 and 2027, up from the expected RM6 billion in 2025, driven by expansion works at GENS and investments in a new floating liquefied natural gas project in the Kasuri block in Indonesia.
“We expect Genting’s adjusted debt/Ebitda to rise to 4.9 times in 2025 and 4.8 times in 2026 before declining to around 4.3 times in 2027. Deleveraging will be supported by earnings contribution from its downstate New York City casino, continued growth at existing gaming operations in Singapore, Malaysia, and Las Vegas, and LNG production starting in the second half of 2027,” it added.
Genting’s standalone liquidity is excellent, supported by fees and dividend income from its operating subsidiaries, said Moody’s.
“However, Genting’s debt maturity wall will build in 2027 when the US$1.5 billion [RM6.16 billion] notes under GOHL Capital Ltd are due for repayment in January 2027. This will be followed by RM1.9 billion of borrowings under Genting RMTN Bhd (RM400 million) and Genting Capital Bhd (RM1.5 billion) — both wholly owned subsidiaries of Genting — that will be due in March 2027 and June 2027 respectively,” it said.
“We expect Genting will need to refinance at least a portion of those debt maturity over the next six to 12 months,” it added.
Genting's share price slipped 15 sen or 4.62% to close at RM3.10 on Monday, giving it a market capitalisation of RM12.02 billion. GENM closed five sen or 2.27% lower at RM2.15, valuing it at RM12.77 billion.