Malaysian gaming giant Genting Bhd is at real risk of becoming a “fallen angel” and losing its investment-grade rating due to the underperformance of some operations and rising expansion costs, according to S&P Global.
The ratings agency also states in a credit FAQ published Tuesday that Genting management likely wants to maintain its investment grade rating but may not be able to follow through on such a commitment while also pursuing growth.
The lengthy report, which comes with Genting Bhd already rated “BBB-” with a negative outlook – just one notch above speculative grade – says that downside risks remain elevated, driven by the underperformance of Resorts World Sentosa (RWS) operator Genting Singapore, Genting New York (on slower ramp) and Resorts World Las Vegas (RWLV).
At the same time, a US$5.5 billion investment into Resorts World New York City through 2030 following receipt of a full casino license last year, and a similar US$5 billion expansion of RWS, has capex at extreme highs for the foreseeable future.
According to S&P, improved EBITDA performance at both RWS and RWLV in the June 2026 quarter were positive signs, while Resorts World New York City is now ramping at a decent rate.
However, “We require further visibility on the recovery prospects of the group’s key subsidiaries to help us to assess the group’s likely overall earnings quality for the next six to 12 months,” the ratings agency said.
“In particular, we want to see a few more quarters of ramp-up at Genting New York’s Resorts World New York City and the sustainability of RWLV’s performance, since these could mitigate prolonged weakness at Genting Singapore.
“In our view, the group has no more buffer for a further downward surprise to operational earnings. Its credit metrics are diverging further from downside trigger, and as such, making near-term recovery seem increasingly unlikely.”
On the likelihood of a downgrade, S&P added, “We could decide to downgrade the group if earnings weakness is prolonged and it has insufficient mitigants to avert credit deterioration. Any unexpected debt-funded acquisitions that would further derail the group’s credit quality could lead to a downgrade.
“The key rating drivers for the group are subsidiaries’ operational performance and management’s commitment to the rating. Once we have greater visibility on the group’s sustainability and quality of operational performance, and management’s willingness and ability to defend the credit rating, we would be in a better position to revisit the outlook and ratings.
“We believe management wants to maintain its investment grade rating both from a reputational and funding cost perspective. However, we also see risks regarding its ability to commit to the ratings, given persistent results underperformance, and its pursuit of growth at the same time.
“Some of these issues have been ongoing for several years, weakening the group’s credit profile.”
With Genting already at the lowest investment-grade rating, any downgrade would make the group a “fallen angel” – likely impacting on its borrowing and refinancing capacity.
Potential short-term remedies could, according to S&P, include selling its 15.47 acres of land in Miami, issuing up to another US$1.6 billion of hybrid securities or to a lesser extent reducing dividends.
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