Genting Malaysia Bhd.

The stable outlooks on GENM reflect that on GENT. The stable outlook on GENT reflects our expectation that the company's credit quality will stabilize following the completion of a major investment cycle, while an operational recovery takes shape over the next two years. This is despite the group's delayed recovery in its operations from the pandemic. We expect GENT's FFO-to-debt ratio to improve to above 20% over the next two years. We may lower the rating on GENM if we downgrade GENT. We may lower the rating on GENT if we expect the group's FFO-to-debt ratio to stay below 20%, or debt-to-EBITDA ratio to be above 4x for a prolonged period. We could also lower the rating on GENM if

...We expect a slow recovery in key credit metrics at Genting Malaysia Bhd. (GENM). This is due to continued travel and social restrictions in Malaysia; GENM's principal asset, Resorts World Genting (RWG), has been closed since May 2021. Given the uncertainty surrounding the delta variant and a slower-than-expected operational recovery in the region, we now expect GENM's EBITDA to reach pre-pandemic levels in 2023. While the company's U.S. operations are showing a sharp recovery, we believe it is inadequate to mitigate the impact of the weakened Malaysian operation. We forecast GENM's ratio of funds from operations (FFO) to debt to sustain at below 20% through 2023. We expect GENM to maintain close ties with parent Genting Bhd. (GENT) We therefore equalize the rating on GENM with that on GENT (###-/Stable/--), the largest shareholder (49.5% stake). GENT has managed the financial and operating policies of RWG since 1989. The rating equalization reflects our view that GENM will remain a core...

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