Moody’s downgrades Genting Bhd as debt pressures intensify following expansion
Moody’s Ratings has cut the credit score of Malaysian conglomerate Genting Bhd and two of its subsidiaries, adding fresh scrutiny to the group’s financial positioning amid an aggressive expansion drive. The downgrade, announced on Monday, concludes a review that began on 16 October, as reported by GamblingNews.uk.
Genting Bhd’s rating has been lowered from Baa2 to Baa3, reflecting what Moody’s described as the company’s “already-weak position due to prolonged deleveraging amid slower-than-expected earnings recovery.” Analyst Anthony Prayugo added that Genting is further pressured by an increase in debt taken on to finance its takeover offer for Genting Malaysia Bhd (GENM), alongside future spending tied to a potential New York City commercial casino licence.
The shift in rating places the group at the lowest rung of investment grade, underscoring the financial strain created by its strategic ambitions.
Genting’s push to consolidate Genting Malaysia Bhd
Genting launched a takeover bid in October aimed at securing full control of GENM, offering RM2.35 per share for the 50.64% stake it did not already own. The proposal sought to strengthen the group’s financial position ahead of its planned development in New York, where it hopes to secure one of three downstate casino licences.
By the 1 December deadline, Genting raised its ownership in GENM to 73.13%. The total remained just under the 75% threshold required to privatise the subsidiary and remove it from Bursa Malaysia, preventing the group from completing its initial objective.
Despite falling short, Genting continued to acquire shares on the open market. As of 4 December, its stake in GENM had climbed to just below 73.80%, signalling a continued desire to consolidate control even after the formal offer period had passed. This incremental accumulation demonstrates Genting’s determination to bring its gaming arm more tightly under the parent company’s strategic and financial umbrella.
Strengthening position for New York City casino bid
At the core of Genting’s push is its ambition to redevelop Resorts World New York City in Queens into a full-scale casino. The company argues that having tighter control of GENM would give it “the financial strength and network to support” the redevelopment if the licence is awarded. A state board recently cleared Genting’s application, pending final review by the New York State Gaming Commission, which is expected to reach a decision by 31 December.
The group has outlined a planned investment of $5.5 billion to overhaul the current slot-only venue, transforming it into a major casino resort. The proposal includes a 500,000-square-foot gaming floor, up to 6,000 slot machines, and 800 table games, positioning the site as one of the largest casino destinations in the United States. To secure the 30-year licence, Genting New York has offered an upfront payment of $600 million. The figure exceeds the minimum required by 20%, reflecting the company’s intent to present a highly competitive bid during a tightly contested selection process.
Moody’s keeps stable outlook despite downgrade
Even with the rating cut, Moody’s has maintained a stable outlook for Genting Bhd and its impacted subsidiaries. The agency expects earnings to continue improving at operations in Singapore and Las Vegas, two markets that have shown consistent recovery following the pandemic’s disruptions. Moody’s also highlighted that “execution risk for [a] downstate New York City project remains minimal such that the project will be earnings accretive by the second half of 2026, supporting a recovery in credit metrics.”
This projection assumes the New York licence is approved and development proceeds on schedule. Finally, Moody’s noted that its stable outlook reflects the expectation that Genting will avoid further debt-funded expansion initiatives in the near term, allowing the group to stabilise leverage levels as existing projects move toward completion and begin contributing to earnings.
The credit downgrade may place additional pressure on Genting’s financial planning, but Moody’s assessment signals confidence that the company’s long-term growth prospects remain viable, particularly if the New York bid proves successful.
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