CreditSights: Genting Bhd must sell non-core assets despite MYR1.25bn rights issue

Genting Bhd will likely need to sell non-core assets to avoid further credit-rating downgrades despite proposing a MYR1.25 billion (US$305.8 million) rights issue, CreditSights said on Monday. The research house called the rights issuance a positive step but assessed it would have only a "modest impact" on the group's credit metrics and forecast that asset disposals — particularly unused Miami land parcels — will be the main lever to reduce leverage.

CreditSights’ view on the MYR1.25bn rights issue

CreditSights described the rights issue, announced by Genting Bhd on the previous Friday, as welcome because it represents a move away from the group's historical reliance on borrowing. The proposed exercise allocates MYR800 million for debt repayment and approximately MYR429.5 million for working capital. The company expects the rights issue to be completed in the first quarter of 2027.

The report from analysts Jonathan Tan, Jun Jie, and Lakshmanan R said the capital raise would only reduce net leverage by about 0.2–0.3 times, bringing net leverage to roughly 4.3 times. That change led CreditSights to call the package positive but insufficient to remove downgrade risk at rating agencies.

Why CreditSights says Genting Bhd must sell assets

CreditSights argued that dividend reductions, issuing perpetual securities and operating earnings improvements in markets including New York, Singapore and Las Vegas would not be enough to offset pressure from Genting's "heavy capital expenditure pipeline." The institution therefore expects non-core asset sales to be the primary tool to stave off downgrades. The report singled out the unused Miami land parcels as the most likely source of meaningful proceeds.

"We believe non-core asset sales will be the main tool to stave off downgrade risks, notably the unused Miami land parcels," the analysts wrote.

CreditSights said it was "cautiously hopeful" that a sale of the Miami land could fetch potentially more than US$1 billion. Genting had previously sought to sell four Miami land parcels for roughly US$1.23 billion in 2023, but that transaction did not complete.

Ratings context and S&P Global Ratings’ sensitivity

S&P Global Ratings noted last month that a disposal at a valuation similar to the 2023 asking price could improve Genting's funds-from-operations-to-debt ratio by between 3 and 4 percentage points. CreditSights judged that the rights issue narrows the risk of losing an S&P investment-grade rating only slightly, describing the risk as "slightly narrower but still pertinent," even as company management reiterated its commitment to preserve that rating.

CreditSights also expects Genting Bhd to avoid further debt-funded attempts to acquire additional shares in its subsidiary Genting Malaysia Bhd over the next 12 to 18 months. That restraint is intended to preserve the parent group's balance sheet and limit additional leverage and rating pressure. Genting Bhd's earlier takeover attempt closed in December 2025 without achieving the 75% threshold for delisting; later purchases increased its stake to about 73.86%, according to reporting by GGRAsia. The analysts said another debt-funded privatisation push is unlikely in the near term.

Balance-sheet mechanics and the near-term bond outlook

CreditSights estimated that, despite downgrade pressures, refinancing risk for Genting's US$618 million bond maturing in January 2027 remains low. The research house cited the group's available cash and ongoing access to bond and loan markets as potential funding sources. The rights issue itself earmarks the bulk of proceeds to reduce debt, but because the leverage improvement is modest, further non-core disposals are still necessary to materially change credit ratios.

Implications for investors, lenders and stakeholders

For creditors and investors, the message is straightforward: the rights issue reduces risk incrementally but does not eliminate it. The potential Miami land sale is the most tangible path to a material improvement in leverage, and a disposal at or above the previously sought US$1.23 billion valuation would have measurable balance-sheet effects. S&P's sensitivity estimate — a 3–4 percentage-point rise in funds-from-operations-to-debt on a similar disposal — provides a concrete gauge of that impact.

Genting Bhd is the parent company of Genting Singapore Ltd, operator of the Resorts World Sentosa casino complex in Singapore, and of Genting Malaysia Bhd, operator of Resorts World Genting, Malaysia's only licensed casino complex. Genting Malaysia also runs casinos in the United States, the Bahamas, the United Kingdom and Egypt. CreditSights noted that earnings improvements in New York, Singapore and Las Vegas would help but are unlikely to fully offset the heavy capital expenditure programme.

What to watch next

Key items for market participants to monitor include any firm sale process for the Miami land parcels and the price achieved, completion of the rights issue in Q1 2027, and the group's operating performance in New York, Singapore and Las Vegas. The proximity of the US$618 million bond maturity in January 2027 also keeps short-term funding and liquidity on the radar for lenders and fixed-income investors. Reporting on the group's stake in Genting Malaysia Bhd and any move toward or away from further acquisition attempts will indicate management's near-term strategic priorities.

GGRAsia covered Genting's stake update and the earlier takeover attempt in previous reporting; readers tracking the corporate action can refer to that coverage for chronology and market reaction. For technology and capital markets teams assessing exposure, the unfolding interaction between the rights issue, potential asset disposals and rating agency sensitivity will determine whether the group's credit profile stabilises or continues to weaken.