S&P Global said Genting lacks a clearly articulated financial policy at a time when subsidiaries faced significant debt maturities in 2027.
PETALING JAYA: The Genting group’s outlook has been revised to negative by S&P Global Ratings as high capital expenditure (capex) and growth priorities weigh on cashflow over the next two to three years.
The rating agency said the group, led by Genting Bhd
, would see its credit quality tested due to elevated spending and risk appetite over the next two to three years.
“We anticipate the group’s funds from operations (FFO)-to-debt ratio could dip below 20% in 2026 and 2027 unless concrete and timely deleveraging measures are implemented,” it added.
The outlook revision applies to Genting, its listed subsidiary Genting Malaysia Bhd as well as Genting New York LLC and Resorts World Las Vegas LLC. The credit ratings for debt issued as well as for the issuers have been reaffirmed.
This followed a Moody’s Ratings downgrade of the issuer ratings of Genting and several subsidiaries last week.
It noted that several of the group’s subsidiaries would be undertaking heavy investments, including Genting New York, which recently secured a full casino licence from the New York State Gaming Commission, Genting Singapore Ltd’s Resorts World Sentosa expansion and Genting Energy Ltd’s investments in a floating liquefied natural gas (FLNG) facility.
“We estimate the group’s total capex in 2026 will be double the RM6bil in 2025, and much higher than the RM4.3bil in 2024. We expect capex to remain above RM8bil annually through 2030,” it said, with spending for the New York casino to account for 30% on average of the total annual capex over the next two to three years.
It said incremental earnings were unlikely to keep pace with spending, as the estimated average run-rate earnings before interest, tax, depreciation and amortisation (Ebitda) from the New York casino would exceed US$400mil (RM1.8bil) annually, while the FLNG facility would not be likely to generate cash flows until mid-2027 at the earliest.
“Given the high spending, we expect Genting Bhd’s discretionary cash flow to remain negative over the next three years.
“This will cause the group’s reported debt to rise toward RM35bil by 2028, from RM21bil in 2024. As such, Genting’s leverage (ratio of FFO to debt) could fall below 20% through 2027,” it said.
S&P Global also took note of parent Genting’s RM3.1bil takeover bid for Genting Malaysia, pointing out that the attempt funded by additional debt to consolidate the US assets could further delay a recovery in leverage, with the group needing to demonstrate commitment to transparency and deleveraging.
It viewed the unexpected debt-funded takeover bid for Genting Malaysia at a time when the rating headroom has narrowed as opportunistic behaviour that reduces predictability of the group’s leverage and growth-centric approach that deviates from the rating agency’s expectations for an investment grade credit profile.
It said Genting lacks a clearly articulated financial policy at a time when subsidiaries faced significant debt maturities in 2027.
This is although the debt would be refinanced in a timely manner while dividends were expected to be reduced below RM1.5bil annually through to 2027 from the RM1.9bil declared in 2024 and RM1.8bil in 2023, while non-core assets such as land in Miami, Florida could be sold.
“However, these alone may not be sufficient to sustainably improve the group’s leverage.
“As such, we believe Genting will need to devise other means to reduce its debt,” it said, pointing to recovery in its other casino operations and Ebitda improvement in the third quarter ended Sept 30, 2025 financial results.
