Genting Malaysia Bhd.

The negative outlook on GENM reflects that on GENT. The negative outlook on GENT reflects our view that the group's delayed recovery of operations and elevated capex leave it with very limited rating headroom over the next 12-18 months. We expect GENT's key credit metrics to only recover in 2022. We would lower the rating on GENM if we downgrade GENT. We may lower the rating on GENT if we expect the group's debt-to-EBITDA ratio to remain above 3x or its FFO-to-debt ratio stays below 30% for a prolonged period. We could also lower the rating on GENM if we detect signs of any reduction in the company's importance to its parent. We may lower our assessment of the stand-alone

...We expect Genting Malaysia (GENM) to maintain close ties with GENT, and therefore equalize the rating on GENM with that on its parent. GENM is listed on the Malaysian stock exchange and GENT (###/Negative/--) is the largest shareholder (49.5% stake). GENT has the ability to manage the financial and operating policies of GENM's principal asset, Resorts World Genting (RWG), since 1989. The rating equalization reflects our view that GENM will remain a core subsidiary, given its integral role in expanding the group's brand and reputation while contributing a material portion of the group's revenue (45%-50%) and EBITDA (30%-35%). GENM develops and operates Resorts World and Genting branded integrated resorts and hotels. Considering GENM is the sole land-based casino operator in Malaysia and has exposure to the U.S. and U.K. markets, we believe it is integral to GENT's business and future strategy....

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