KUALA LUMPUR (Sept 7): Fitch Ratings lowered credit ratings of gaming giant Genting Bhd (KL:GENTING) and its two subsidiaries, citing elevated debt levels amid heavy capital spending.

The downgrade reflects the ratings agency’s expectations that Genting’s overall net debt will stay above four times its earnings before interest, taxes, depreciation and amortisation for the next three years, Fitch said in a statement on Monday.

“We expect the pace of deleveraging to be slow due to substantial capex to expand key properties, including those in Singapore and New York,” the agency said.

Genting was downgraded to BBB- from BBB. The rating sits right at the bottom of investment grades. Funding vehicle Genting Overseas Holdings Ltd is cut to BBB- from BBB while Resorts World Las Vegas LLC is now one notch lower at junk rating of BB+. Their outlooks are ‘stable’.

Both Genting Overseas and Resorts World Las Vegas, which operates the integrated casino-resort, are wholly-owned subsidiaries of Genting.

Operating profit from Genting’s New York facility would be affected by high initial costs with annual capital expenditure averaging around US$800 million (RM3.2 billion) over the next five years, the agency flagged. In Singapore, expansion costing S$4 billion would result in negative free cash flow until 2030, it noted.

Further, softer VIP gaming volumes are likely to continue weighing on other operations through 2026 and 2027, Fitch said.

Gaming revenue at Singapore will be flat in 2026, while revenue growth for the Malaysian properties could be muted amid high travel costs and macroeconomic uncertainties, according to the agency’s forecasts.