Fitch Ratings Inc has downgraded the long-term issuer default rating of Malaysian gambling and services conglomerate Genting Bhd to ‘BBB’ from BBB+’’, albeit with a ‘stable’ outlook.
It has given the same downgrade to Resorts World Las Vegas LLC, an entity associated with an under-construction casino resort in Las Vegas, Nevada, in the United States; and to Genting Overseas Holdings Ltd.
The downgrade reflected Fitch Ratings’ expectation that “recovery from the coronavirus pandemic will be slower than initially forecast, in particular for Singapore, which relies on international tourism, as borders are likely to remain shut for the rest of 2020 and continued social distancing measures constrain visitor volumes”.
Genting Bhd’s unit Genting Singapore Ltd runs the Resorts World Sentosa casino resort as one half of a casino duopoly in that city-state.
The ratings institution added regarding the Genting parent: “The slow recovery and high capital expenditure commitments will keep Genting’s consolidated net leverage above 2x until end-2024, which is no longer consistent with a ‘BBB+’ rating.”
Fitch Ratings did note some positives regarding Genting Bhd in its Friday announcement. It stated: “Genting [Bhd’s] rating reflects its position as the sole casino-licence holder in Malaysia and robust share in the Singapore duopolistic market.”
The rating agency dded: “Genting’s other businesses add diversification both in terms of geography and sectors, and the group has a history of maintaining a prudent balance sheet.”
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