Fitch ratings analysts believe that Genting Malaysia will continue to back its New York casino and resort in “times of distress.”
Malaysia.- Analysts at Fitch Ratings have said they believe it is very likely that the Asian casino operator, Genting Malaysia, will financially support its New York subsidiary in “times of distress”.
The ratings agency has given Genting New York LLC (GenNY), a fully owned subsidiary of Genting Malaysia Berhad, an issuer default rating (IDR) of ‘BBB-‘ with a negative outlook.
The agency has also assigned a ‘BBB-‘ rating to the proposed unsecured notes to be issued by GenNY to refinance its existing debt.
GenNY owns and operates Resorts World New York, a slot-only casino equipped with over 6,500 video lottery terminals and electronic table games.
NY branch strategic for Genting Malaysia
Fitchs considers the business to be of strategic importance for the Malaysian casino giant due to its growth strategy and geographic diversification ambitions. It therefore believes the group will support the NY branch during the stress of Covid-19 restrictions.
The analysts said in a note on Monday: “We believe Resorts World New York is strategically important to the group’s long-term expansion plan in the US. It contributed only around 20% to GenM’s 2019 EBITDA, but acts as the group’s US flagship property.”
Fitch also believes the property will become an “important feeder market” to Las Vegas, where Genting is building a US$4.3bn integrated resort.
GenM, on its own, has invested US$535 million in GenNY to date, the ratings agency said.
It said: “Fitch believes GenM is likely to provide support in times of distress, given the reputational risk associated with a default and large committed investments from GenM and Genting to establish the group’s presence in the US.”
Genting Malaysia has also felt the impact of the pandemic restrictions on its Malaysian operations.