Genting Malaysia Berhad has declared that Genting New York LLC and GENNY Capital Inc., its wholly-owned US subsidiaries, would sell $525 million in 7.25 percent senior unsecured notes due in 2029.
The unsecured notes were rated BBB- (negative) by Fitch Ratings and BB+ (stable) by S&P Global Ratings.
The notes will be listed on the Singapore Exchange Securities Trading Limited (SGX-ST) with approval granted “in principle.”
It is anticipated that Genting New York would utilize the notes to pay down its “existing indebtedness.”
The firm adds that Genting New York will join a new Senior Secured Credit Facility “concurrently with the issuance” that would comprise a $150 million revolving credit facility and a $775 million delayed draw term loan facility. This raises the entire sum at stake to $1.45 billion.
Fitch Ratings stated in a report on Monday that the $525 million first payment will be used to refinance the $525 million Senior Unsecured Notes, which mature in 2026. It also states that a $175 million secured term loan from Genting New York will be repaid.
For the most part, in the event that the firm “does not win a full-scale casino license in downstate New York, for which bidding is underway,” Fitch analysts have maintained the Rating Watch Negative (RWN) grade that was established in September 2023.
A further downgrading might result from the ratings agency noting that in such case “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.”
In reference to the recently released notes, Genting New York is ‘looking to optimize its capital structure and liability management in anticipation of the possible new gaming license,’ according to Fitch.
The organization states that Genting “faces strong competition” but expects that the licenses “are likely to be awarded by 2H25.” The license would increase the company’s “geographic diversification,” provide it “access to a deep market,” and “potentially lower tax” on Genting New York’s gross gaming income, which is now “around 67 percent.”
With regard to Genting Malaysia, the analyst projected that “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,” revenue growth would be driven by a rebound in domestic traffic and an increase in foreign visitors.
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