Genting Malaysia said Tuesday that its US subsidiaries, Genting New York LLC and GENNY Capital Inc, have priced the offering of an additional US$100 million 7.250% Senior Unsecured Notes due 2029, on top of an initial US$525 million offering announced last week.
In a filing, the company said the additional notes form part of the same series as the initial US$525 million offering and come with the same terms. Like the initial offering, they will also be used to pay down existing indebtedness, it added.
Genting Malaysia announced last week a total of US$1.45 billion in equity raising, with the notes offering accompanied by a new Senior Secured Credit Facility entered into by Genting New York LLC. The facility includes a US$775 million delayed draw term loan facility and a US$150 million revolving credit facility.
The notes have been assigned a BB+ (stable) rating by S&P Global Ratings and BBB- (negative) by Fitch Ratings, with Fitch stating that it continues to rate Genting New York a notch below Genting Malaysia – although this rating could be further weakened should Genting Group’s bid to win a full New York casino license ultimately fail.
“In that case, we think Genting New York LLC’s strategic importance to the Genting group and incentives for Genting Berhad to provide support are likely to be weaker, which could lead to Genting New York LLC’s IDR (Issuer Default Rating) being downgraded by more than one notch,” Fitch analysts wrote.
“Genting Malaysia has ‘High’ strategic and ‘Medium’ operational incentives to provide support to Genting New York LLC. The strategic incentive is underpinned by the competitive advantage and growth potential that Genting New York LLC lends to the group, which are centered on a full-scale casino licence win. If Genting New York LLC does not win the licence, we are likely to lower our assessment of the strategic incentive for support.”
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