Moody’s cuts Genting

Moody’s Investors Service said it downgraded Genting Bhd. (GENB) to Baa2 from Baa1.

Moody’s also trimmed Genting’s Genting Overseas Holdings Ltd. to Baa2 from Baa1.

At the same time, Moody’s downgraded the backed senior unsecured rating of the notes issued by GOHL Capital Ltd., a wholly owned subsidiary of GOHL, to Baa2 from Baa1. GOHL guarantees the notes.

A keepwell deed between Genting and the two subsidiaries supports both GOHL and GOHL Capital.

Moody’s confirmed the A3 issuer rating of Genting Singapore Ltd.

The agency changed the outlook to negative from rating under review, which Moody’s started on March 16. The downgrades and outlook changes conclude the review, the agency said.

“The downgrade reflects our expectation that GENB’s credit metrics will weaken and remain at levels no longer consistent with its Baa1 rating, driven by the weakened operating performance and the temporary closure of its integrated resorts worldwide due to the coronavirus outbreak at a time when debt is increasing to fund the development of Resorts World Las Vegas,” said Jacintha Poh, a Moody’s vice president and senior credit officer, in a press release.

Moody’s said it forecasts GENB’s credit metrics as measured by debt/ EBITDA to increase to 9.6x in 2020 from 4.2x in 2019, before gradually recovering to around 6x in 2021 and around 5x in 2022.

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