S&P Global Ratings has revised the outlook on several Genting Group entities to negative, citing concerns that sustained capital spending and recent strategic decisions could pressure the Malaysian conglomerate’s credit quality over the next few years. While the ratings agency affirmed the existing issuer and issue credit ratings of Genting Bhd, Genting Malaysia Bhd, Genting New York LLC, and Resorts World Las Vegas LLC, it cautioned that the balance between spending and earnings generation is becoming increasingly strained.

According to S&P, the shift in outlook reflects expectations that Genting’s investment commitments will remain elevated across multiple geographies, even as incremental earnings struggle to keep pace. The agency said this dynamic could push leverage higher and reduce financial flexibility unless the group implements timely and concrete measures to reduce debt.

Major Investment Commitments Drive Higher Capex

S&P expects Genting’s total capital expenditure to rise sharply over the next several years. The agency estimates that group-wide capex in 2026 will be double the MYR6 billion recorded in 2025 and significantly above the MYR4.3 billion spent in 2024. It added that annual spending is likely to remain above MYR8 billion through 2030.

Several large projects underpin these forecasts. A key driver is Genting New York LLC’s expansion plans following the award of a full casino license for Resorts World New York City. The proposal involves a US$5.5 billion expansion through 2030, alongside a US$600 million upfront license fee in exchange for a 30-year operating term. Genting New York has indicated that the first phase of this expansion could open as early as the second quarter of next year.

S&P estimates that costs tied to the New York license will represent close to 30 percent of the group’s total annual capex over the next two to three years. These outlays include the license payment itself, refurbishment of existing facilities, and the construction of new components at the site. Analysts at the ratings agency project that the New York complex could generate an average annual run-rate EBITDA exceeding US$400 million once fully operational.

In parallel, Genting Singapore Ltd continues work on the expansion and upgrade of Resorts World Sentosa, part of Singapore’s casino-resort duopoly. The group is also committing capital through Genting Energy Ltd’s investment in a floating liquefied natural gas facility, which S&P said is unlikely to begin generating cash flows until at least mid-2027.

Debt Levels Expected to Climb as Cash Flow Turns Negative

S&P warned that the scale and timing of these investments will weigh on Genting’s cash generation. Despite signs of operational recovery in Singapore following disruptions at brownfield facilities, the agency said large capital outlays will reduce the group’s cash buffer. “Incremental earnings are unlikely to keep pace with spending,” S&P said.

As a result, S&P expects Genting Bhd.’s discretionary cash flow to remain negative over the next three years. The agency projects that reported debt could rise to around MYR35 billion by 2028, compared with MYR21 billion in 2024. This increase would place further pressure on leverage metrics, with the ratio of funds from operations to debt potentially falling below 20 percent through 2026 and 2027.

The ratings agency also highlighted Genting Bhd.’s recent corporate actions as a contributing factor. The parent company has increased its stake in Genting Malaysia from below 50 percent to nearly 74 percent, including a MYR3.1 billion takeover bid that remains unrealised. S&P described this move as indicative of an increased risk appetite at a time when ratings headroom is narrowing.

S&P noted that Genting lacks a clearly articulated financial policy, which it said reduces predictability around leverage and heightens exposure to event risks. The agency warned that any further debt-funded efforts to privatise Genting Malaysia, particularly to consolidate U.S. assets, could delay any recovery in leverage.

While S&P expects Genting to reduce dividend payouts in the coming years—potentially to below MYR1.5 billion annually through 2027—it said these steps may not be enough on their own. The group has not declared interim dividends for 2025, and S&P acknowledged that the sale of non-core assets, such as land holdings in Miami, could provide some relief.

However, the agency concluded that asset sales and dividend reductions alone may fall short of restoring balance. “As such, we believe Genting Bhd will need to devise other means to reduce its debt,” S&P stated, as Inside Asian Gaming reports.