Genting Bhd.

The negative outlook on Genting reflects our expectation that the group's delayed recovery in its operations and its 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 its FFO-to-debt ratio at 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 takes longer than we expect; (3) RWLV is delayed or its take-off after opening is slower than our initial expectation, or

...Genting has been hit hard by the COVID-19 outbreak and we expect operations to normalize from 2022. We expect a long recovery path for Genting as its operations in various countries continue to be affected by various COVID-19-related measures. A ramp-up of its operations and revenue in 2021 would be dependent on various countries' ability to control new infections and accelerate vaccine rollout. We expect Genting's operations to return to pre-COVID-19 levels only in 2022. During much of 2020, casinos globally have temporarily closed their operations and the global fallout from the pandemic has translated into a weaker operating environment. This is also reflected in Genting's 2020 EBITDA decline of 63% year on year. 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. 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...

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