Genting Overseas Holdings Limited (GOHL) has received sub-investment grade ratings for its proposed US-dollar denominated perpetual securities.
Fitch Ratings assigned a ‘BB+’ rating, while Moody’s Ratings designated the instruments as ‘Ba2’, reflecting the deep subordination and high leverage currently associated with the parent group.
Balancing Liquidity and Massive CAPEX
Both agencies noted that while the issuance provides essential liquidity support, it offers only a limited buffer against downgrade risks for parent company Genting Berhad. Genting Overseas is currently managing an aggressive global expansion phase, including:
- Singapore: A $5.5 billion expansion of Resorts World Sentosa.
- New York: Securing a full casino license and developing Resorts World New York City.
- Malaysia: Increasing its equity stake in Genting Malaysia Berhad.
Execution Risks and Leverage Forecasts
Fitch expects the group’s net leverage to peak at 5.5 times EBITDA before potentially falling, provided that deleveraging efforts and project returns materialize as planned. Moody’s characterized the deal primarily as a refinancing maneuver, intended to fund a tender offer for $1.5 billion of 2027 notes. This effectively “stretches” maturities but increases the overall cost of capital.
Both raters highlighted that GOHL’s debt service remains heavily dependent on dividends from Genting Singapore Limited. As long as capital expenditure remains high, the possibility of a rating upgrade remains limited.
The perpetuals are treated as 50% equity in both analyses, but the underlying sentiment remains one of caution as the group navigates tight finances against the backdrop of its “ambitious builds” in New York and Singapore.
