Genting Bhd.

The negative outlook on Genting reflects our expectation that the group's delayed recovery of its operations and elevated capex have left it with very limited rating headroom in the next 12-18 months. We expect Genting's debt-to-EBITDA ratio and ratio of funds from operations (FFO) to debt to recover only in 2022. We may lower the rating on Genting if we expect the group's debt-to-EBITDA ratio to remain above 3x or FFO-to-debt ratio to sustain below 30% for a prolonged period. This could happen if: (1) Genting's market position deteriorates; (2) recovery in the number of visitors following COVID-19 is longer than we expect; (3) the ramp-up of RWLV is delayed or slower than our initial expectation, or the project's capex

...Genting Bhd. will be hit hard by the COVID-19 outbreak. We believe the global fallout from the pandemic will translate into a weaker performance in 2020 and a long recovery path. Casinos globally have closed operations at different times and a reopening of all properties remains uncertain. Meanwhile, the global economy has weakened, with Singapore and Malaysia entering recession with growing unemployment. As revenue recognition in the second quarter will plummet, and the casinos would likely need to comply with social distancing measures as they reopen, we expect the recovery path to take even longer in the weaker macro environment. RWLV could have a slower ramp-up because we expect Las Vegas to be one of the last gaming markets to recover in the U.S. We believe RWLV's construction is on track to open in summer 2021, but a ramp-up will likely be slower than anticipated. We foresee structural changes that could alter the attractiveness of Las Vegas as a gaming destination in the next 24...

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