Genting Malaysia Berhad has announced that it will be offering $525 million in 7.25 percent senior unsecured notes due 2029 via its wholly-owned US subsidiaries Genting New York LLC and GENNY Capital Inc.
S&P Global Ratings assigned a rating of BB+ (stable) for the unsecured notes, while Fitch Ratings ranked them as BBB-(negative).
Approval ‘in-principle’ has been received for the listing of the notes on the Singapore Exchange Securities Trading Limited (SGX-ST).
The notes are expected to be used to finance Genting New York’s ‘existing indebtedness’.
The group furthers that ‘concurrently with the issuance’, Genting New York will also enter a new Senior Secured Credit Facility – including a $775 million delayed draw term loan facility and a $150 million revolving credit facility. This brings the total amount in play to $1.45 billion.
In a Monday note referencing the notes offer, Fitch Ratings indicated that the initial $525 million will be used to refinance $525 million Senior Unsecured Notes which come due in 2026. It notes that Genting New York will also repay a $175 million secured term loan.
Fitch analysts has maintained its Rating Watch Negative (RWN) evaluation defined in September 2023, largely in case the group does ‘not win a full-scale casino license in downstate New York, for which bidding is underway’.
The ratings agency notes that in that eventuality ‘we think GENNY (Genting New York)’s strategic importance to the Genting group and incentives for Genting Berhad […] to proide support are likely to be weaker’, which could in turn cause another downgrade.
Speaking of the new notes, Fitch indicates that Genting New York ‘is seeking to optimize its capital structure and liability management in preparation for the potential new gaming license’.
The group estimates the licenses ‘are likely to be awarded by 2H25’ but notes that Genting ‘faces strong competition’. The license would allow the company ‘access to a deep market,’ boost its ‘geographic diversification’ and ‘potentially lower tax’ on Genting New York’s gross gaming revenue from ‘around 67 percent currently’.
Looking to Genting Malaysia, the analyst indicated that they expected ‘revenue growth to be driven by a rebound in domestic traffic and increase in international tourists as regional travel continues to recover, supported by the completion of repairs to an access road connecting Batang Kali to Genting Highlands from early July 2024’.
