S&P Flags Genting’s Expansion Plans as Credit Risk, Outlook Cut to Negative

According to the ratings agency, Genting and its key subsidiaries are entering a prolonged heavy investment cycle that is expected to materially increase leverage between 2025 and 2030. Major spending commitments include investments linked to Genting’s newly awarded full gaming licence in New York, the large-scale expansion of Resorts World Sentosa in Singapore, and Genting Energy’s floating liquefied natural gas (FLNG) project in Indonesia. These initiatives come on top of Genting Bhd’s recently announced RM3.1 billion (US$650 million) debt-funded takeover bid for Genting Malaysia.

S&P estimates that group capital expenditure will double from the RM6 billion planned for 2025 and remain above RM8 billion annually through 2030. Roughly 30% of total spending over the next few years will be related to the New York gaming licence, covering licence fees, renovations and new construction works.

While these projects are expected to enhance Genting’s long-term earnings base, S&P cautioned that incremental cash flow will lag investment outlays. The New York operations could eventually generate more than US$400 million in annual EBITDA, but the FLNG facility is not expected to contribute cash flow until at least mid-2027. At the same time, cash reserves at the Singapore operations are projected to decline as construction activity intensifies.

As a result, discretionary cash flow at Genting Bhd is expected to remain negative for the next three years, with group debt forecast to rise to approximately RM35 billion by 2028, up from RM21 billion in 2024. S&P warned that the group’s funds from operations (FFO) to debt ratio could fall below 20%, a level the agency considers incompatible with a strong investment-grade credit profile.

The negative outlook also reflects concerns over leverage predictability, stemming from Genting’s growth-driven strategy, the absence of a clearly articulated financial policy, and the unexpected debt-funded bid for Genting Malaysia. In addition, sizable debt maturities in 2027, including US$1.5 billion in guaranteed notes at Genting Overseas Holdings, will require timely and well-executed refinancing.

Despite these pressures, S&P affirmed Genting’s current ratings, pointing to the group’s strong market position in New York and the strategic importance of Genting Malaysia, Resorts World Las Vegas and Genting New York to the parent company.

S&P said a downgrade could follow if leverage remains elevated or if earnings from key projects underperform expectations. The outlook could be revised back to stable if Genting demonstrates sustained financial discipline and maintains its FFO to debt ratio above 20%.