S&P Global shifts Genting companies’ outlook to negative on weaker credit quality forecasts

[SINGAPORE] S&P Global Ratings revised its outlook for the Genting group of companies to “negative”, citing expectations of weakening credit quality amid high capital expenditure.

The credit rating agency on Wednesday (Dec 17) revised outlooks for Bursa Malaysia-listed Genting, Genting Malaysia, Genting New York and Resorts World Las Vegas to “negative”.

It noted that the group’s elevated spending and risk appetite will “test its credit quality”, which could weaken over the next two to three years as several Genting subsidiaries are set to undertake heavy investments over the period.

“We estimate the group’s total capital expenditure in 2026 will be double the RM6 billion (S$1.9 billion) in 2025, and much higher than the RM4.3 billion in 2024. We expect capex to remain above RM8 billion annually through 2030,” S&P Global said.

Incremental earnings are “unlikely to keep pace with spending”, it said.

The investments by Genting subsidiaries include Genting New York’s spending after securing a full gaming New York licence; Genting Singapore’s Resorts World Sentosa’s expansion; and Genting Energy’s investments in a floating liquefied natural gas facility.

Group’s reported debt expected to rise

“Given the high spending, we expect Genting’s discretionary cashflow to remain negative over the next three years. This will cause the group’s reported debt to rise toward RM35 billion by 2028, from RM21 billion in 2024. As such, Genting’s leverage could fall below 20 per cent through 2027,” S&P Global said.

The ratings firm highlighted that Genting’s growth-centric approach deviates from its “expectations for an investment-grade credit profile”.

It noted Genting’s lack of a clearly articulated financial policy, pointing to its “unexpected debt-funded takeover bid” to privatise Genting Malaysia “at a time where the rating headroom is narrowing”.

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“Such opportunistic behaviour reduces predictability of the group’s leverage, which could deteriorate due to event risk,” S&P Global said.

“Any attempt by Genting to privatise Genting Malaysia via additional debt to consolidate the US assets could further delay a recovery in leverage, and the group will need to demonstrate its commitment to transparency and deleveraging.”

The Business Times previously reported that Genting’s attempt to take Genting Malaysia private had fallen short, with its offer closing with just 73 per cent acceptances.