Asian casino operator, Genting Malaysia Berhad, reportedly ‘has the liquidity’ to complete the development of large projects in Las Vegas and Singapore but may jeopardize its future ‘deleveraging trajectory’ by attempting to expand into markets such as Japan.
Resorts World Las Vegas cash:
According to a report from GGRAsia, this is the opinion of Fitch Ratings Incorporated and came only two days after Genting managed to secure some $1 billion in additional cash for use on its under-construction Resorts World Las Vegas integrated casino resort.
GGRAsia further reported that this new funding for the giant Las Vegas project was obtained on Tuesday thanks to the issuance by the Kuala Lumpur-listed casino firm’s wholly-owned Resorts World Las Vegas LLC and Resorts World Las Vegas Capital Incorporated subsidiaries of 4.625% senior notes featuring a 2029 due date. That same day saw the former subordinate acquire a $1.2 billion revolving credit facility alongside a $400 million term loan, which means that its parent now has about $2.6 billion in fresh capital to use on the coming Resorts World Las Vegas enterprise.
Fitch Ratings Incorporated reportedly confirmed that it had given Resorts World and these recent deals a long-term default rating of A- while moreover bequeathing the entire enterprise with a ‘stable’ outlook.
Previously described by Genting Malaysia Berhad as a ‘multi-billion-dollar integrated resort,’ the China-themed Resorts World Las Vegas is expected to open in late-2020 along the northern end of the Las Vegas Strip complete with 3,400 hotel rooms in addition to a 110,000 sq ft baccarat-friendly gaming floor and a 3,200-seat theater. Although the casino firm has yet to reveal a specific price tag for the Nevada project, multiple investment analysts have estimated the cost of the entire scheme at around $4 billion.
Resorts World Sentosa proposal:
In Singapore, Genting is hoping to embark on a project that would see its Singapore subsidiary expand the existing Resorts World Sentosa facility. However, any such plan would require the subordinate to spend a minimum of $3.3 million in order to maintain the current casino operating duopoly until the end of 2030.
Last week saw the Singapore subsidiary declare that it will be utilizing ‘internal cash resources’ to voluntarily pay back early some $501.42 million from its $1.67 billion syndicated senior secured credit facilities in order to ‘improve its capital efficiency.’
Moves such as this reportedly prompted Fitch to declare that Genting Malaysia ‘has the liquidity, leverage and free cashflow capacity to fund’ expansions in Las Vegas and Singapore while its ‘track record of timing its capital expenditures to broadly match its operating cash flows’ has assisted it in successfully managing ‘leverage during expansions.”
Reportedly read the statement from Fitch…
“However, any additional multi-billion-dollar investments will likely delay Genting [Malaysia Berhad’s] deleveraging trajectory and may constrain its ability to deleverage to below one time, the level at which [we] would consider a negative rating action.”