Genting Malaysia rating cut to BBB-

PETALING JAYA: Fitch Ratings has downgraded Genting Malaysia Bhd’s (GenM) long-term issuer default rating (IDR) to BBB-‌ from BBB.

In a statement, Fitch said the outlook for the company is stable.

“Fitch has also downgraded the rating on the GenM-guaranteed US$1bil senior unsecured notes due 2031 to BBB-‌ from BBB.

“These rating actions follow the downgrade of the long-term IDR of GenM’s 73.8% parent, Genting Bhd (GENT), to BBB- from BBB. GenM’s IDR reflects its standalone credit profile (SCP) of BBB-‌, which is at the same level as GENT’s IDR.

“We consider GENT’s incentives to support GenM to be high. Therefore, any weakening of GenM’s SCP would not by itself lead to a downgrade, as GenM’s IDR would be equalised with that of GENT.”

In addition, Fitch has affirmed the IDR of GenM’s wholly-owned subsidiary, Genting New York LLC, at BBB-‌‌.

“The outlook is stable. Genting New York’s rating is aligned with Fitch’s internal credit assessment of Genting America Inc (Genai), which owns 100% of Genting New York.”

Fitch said Genting New York is on track to open 400 table games by January 2027, with phase two of the expansion beginning in July 2026, in line with its expectations.

“We forecast capital expenditure (capex) to remain high, averaging about US$800mil a year over the medium term.

“Out of the remaining US$4.4bil pledged for the expansion, about US$700mil has been spent to date, including US$500mil for the licence fee.

“The remaining US$3.7bil will be deployed over the next five years and will put pressure on Genting New York’s credit metrics during the construction period.”

Fitch said gaming revenue has risen sharply since the opening of table games in April 2026, reflecting robust early demand.

“However, we now forecast a slower earnings before interest, taxes, depreciation and amortisation (Ebitda) ramp-up, with 2026 Ebitda of US$208mil against our previous estimate of US$215mil.

“The revision is due to higher start-up operating costs tied to the phased rollout.”

Fitch said it expects Ebitda to reach around US$450mil by 2028 as more tables and slot machines are added and margins normalise with scale.

“Resorts World New York City continues to benefit from the first-mover advantage in New York, supported by a dense population base and high income levels in the surrounding catchment area.”

Additionally, Fitch said GenM has reorganised its US and Bahamas operations, placing all US properties, including Genting New York and Empire Resorts Inc, under Genai. “Genai has raised US$2bil of secured bank loans to refinance Empire’s US$300mil bond due 2026, refinance Genting New York’s existing US$775mil term loan drawn and fund Genting New York’s capex.”

Fitch expects the performance of GenM’s Malaysia operations to rise by 2% in 2026 as revenue continues to recover from the weak first quarter of financial year 2026.

“Revenue increased marginally by 1% year-on-year in the first half of financial year 2026 (1H26) due to soft very important player gaming volume in 1H26.

“We expect earnings to stay soft for the rest of the year, as revenue from international tourists and domestic traffic may still face challenges due to high airfares and macroeconomic uncertainties.”