Research Update: Genting Bhd., RWLV Ratings Placed On CreditWatch Negative On Potential Investment In Empire

In our view, Genting's proposed acquisition of a stake in U.S.-based casino operator Empire Resorts Inc. will strain its already weakened leverage over the next two years, if the acquisition goes through. We see a risk of Malaysia-based Genting's credit metrics deteriorating in the next 90 days. We believe Genting would likely support Empire's outstanding debt to maintain Resorts World Catskills' brand and reputation, a development that comes as the Genting group's capex is already at a peak. On Aug. 15, 2019, S&P Global Ratings placed its 'A-' long-term issuer rating on Genting Bhd. on CreditWatch with negative implications. We also placed the 'BBB+' long-term issuer credit rating on Genting's subsidiary Resorts World Las Vegas LLC (RWLV) on CreditWatch negative.

...- In our view, Genting's proposed acquisition of a stake in U.S.-based casino operator Empire Resorts Inc. will strain its already weakened leverage over the next two years, if the acquisition goes through. - We see a risk of Malaysia-based Genting's credit metrics deteriorating in the next 90 days. We believe Genting would likely support Empire's outstanding debt to maintain Resorts World Catskills' brand and reputation, a development that comes as the Genting group's capex is already at a peak. - On Aug. 15, 2019, S&P Global Ratings placed its 'A-' long-term issuer rating on Genting Bhd. on CreditWatch with negative implications. We also placed the '###+' long-term issuer credit rating on Genting's subsidiary Resorts World Las Vegas LLC (RWLV) on CreditWatch negative. - We will resolve the CreditWatch status after there is clarity on Genting acquiring a 49% stake in Empire and Empire's debt resolution plan....

Research Update