Genting Overseas Holdings Limited’s (GOHL) proposed perpetual securities have been assigned sub-investment grade ratings by both Fitch Ratings and Moody’s Ratings, with both agencies indicating that while the issuance may support the group’s credit profile, it offers only limited mitigation against downgrade risks at parent Genting Berhad.
Fitch assigned a ‘BB+’ rating to the proposed securities to be issued by GOHL Capital Holdings Limited, a wholly owned funding vehicle of Genting Overseas Holdings Limited. The rating sits two notches below GOHL’s ‘BBB’ Long-Term Issuer Default Rating, reflecting higher loss severity and subordination relative to senior obligations.
The proposed issuance comes amid a series of large-scale investments by the group that have increased balance sheet pressure. These include a higher stake in Genting Malaysia Berhad, securing a full casino license in New York, and a $5.5 billion expansion of its Singapore integrated resort, Resorts World Sentosa. Against this backdrop, the perpetual securities are seen as part of efforts to strengthen liquidity and extend the group’s financial runway.
Fitch said it expects to assign 50 percent equity credit to the instruments, citing features such as deep subordination, optional coupon deferral, and long-dated maturity.
Proceeds from the issuance are expected to support Genting Berhad’s credit metrics, including lowering its EBITDA net leverage ratio. However, Fitch maintained a ‘Negative’ Outlook on the parent due to persistently high leverage and risks around deleveraging.
Fitch estimates Genting Berhad’s leverage could peak at around 5.5 times before easing in the coming years, but said sustained earnings growth and demonstrated deleveraging will be critical to maintaining its current rating. It added that execution risks tied to major investments, including the group’s New York operations, as well as broader macroeconomic uncertainties, could weigh on the deleveraging trajectory.
Refinancing focus with leverage still elevated
Separately, Moody’s assigned a ‘Ba2’ rating to the same proposed US dollar-denominated subordinated perpetual securities, also positioning them two notches below GOHL’s ‘Baa3’ rating due to their subordinated nature and hybrid characteristics.
Moody’s framed the issuance primarily as a refinancing exercise rather than an expansion move. The proceeds are intended to fund a tender offer for $1.5 billion of notes due in 2027, extending maturities and supporting liquidity, albeit at the cost of higher subordination risk.
The agency similarly views the instruments as having both debt and equity characteristics, assigning a 50 percent equity treatment in its credit analysis.
However, Moody’s said GOHL’s ability to service its obligations remains dependent on dividend inflows from Genting Singapore Limited, in which it holds a majority stake. Dividend coverage is expected to remain adequate, but the reliance underscores structural limitations in GOHL’s standalone credit profile.
At the group level, Moody’s noted that Genting Berhad’s credit metrics will remain under pressure from elevated capital expenditure, particularly linked to expansion at Resorts World New York City. The agency expects leverage to stay relatively high in the near term, limiting the scope for rating upgrades despite anticipated earnings growth.
