Genting Bonds: Stretched, Not Broken

• Weaker credit, not distressed. Moody’s and Fitch have cut GENT to BBB-, and S&P holds BBB- on negative outlook. It is still investment grade with all four agencies, and RAM’s AA1 covers the MYR bonds.
• Leverage is the main concern. Net debt/EBITDA rose from 2.0x to 3.7x on the GENM take-over, the New York licence fee and heavy capex. We expect it to ease only slowly through 2028. Nonetheless, interest cover remains at 3.4x and debt/tangible assets is 55%.
• Liquidity is the comfort. RM18.8 bil of cash and liquid assets against RM9.9 bil of debt due within a year. Near-term maturities are already being refinanced early.
• Earnings are diversified, and the US is turning. Malaysia is steady with margins above 40%, Singapore is weaker but mid-transformation, and US EBITDA is up 62% as New York ramps up.
• We stay comfortable with the three GENT bonds, with GENTMK 4.18% 2029 (4.66% YTW) as the pick for new investors. For USD, FWDGHD 5.252% 22Sep2030 (USD) and PETBRA 5.600% 03Jan2031 (USD) offer better value than Genting’s Jan-2027 USD notes.

About Genting

Genting Berhad is a Malaysian holding company and one of Asia's largest casino-resort groups. It is controlled by the Lim family through Kien Huat, which holds about 45%. It runs five businesses, mostly through listed subsidiaries:

• Leisure & hospitality (82% of FY2025 revenue): Resorts World Genting in Malaysia and casinos in the UK and Egypt (via Genting Malaysia, 73.8%), Resorts World Sentosa (via Genting Singapore, 52.7%), Resorts World Las Vegas (100%), and Resorts World New York City and Empire Resorts in New York (via Genting Malaysia).
• Plantation: oil palm estates in Malaysia and Indonesia, plus downstream refining (via Genting Plantations, 55.4%).
• Power: Banten coal plant in Indonesia, wind farms in India, and a 49% stake in China's Meizhou Wan plant.
• Oil & gas: the Kasuri block in West Papua, Indonesia.
• Property: township and property development.

Chart 1: Share of revenue and adjusted EBITDA to Genting group, by business segments (FY2025)

Casinos in Malaysia and Singapore produce about 69% of operating EBITDA from 55% of revenue. Resorts World Genting holds Malaysia's only casino licence and Resorts World Sentosa is one of two in Singapore, so their margins are high. US & Bahamas brings a fifth of revenue while New York ramps up.

What happened

In just under a year, GENT raised stakes in Genting Malaysia (GENM), refinanced its biggest USD bond early, saw its ratings cut or put on negative outlook, and launched a rights issue.

Table 1: Chronicle of events afflicting Genting Berhad

Why it matters for bondholders

The GENM offer: more debt today, more control of cash. The RM3.26 bil cash outlay pushed GENT's net debt from RM17.6 bil at end-2024 to RM23.3 bil at end-2025. In return, GENT now owns nearly three-quarters of GENM, which runs Resorts World Genting, its most stable earner. GENT also now receives about three-quarters of any GENM dividend, up from about half. GENM paid RM850 mil of dividends in 2024 and RM227 mil in 2025, of which GENT's share was roughly RM420 mil and RM112 mil. In 1H2026 GENM paid RM397 mil, and GENT's share rose to about RM293 mil.

The rights issue: small in size, strong in signal. RM1.25 bil is about 4% of GENT's RM28.7 bil net debt at June 2026, and the RM41.3 mil a year in interest it saves is modest. What matters more is who is paying. The controlling family is putting money in, not taking it out, and the issue is fully covered by its undertaking and underwriting.

The downgrades: a step down, but still investment grade. Moody's and Fitch now sit at the lowest investment-grade rung, and S&P is on negative outlook at that same level. A further S&P cut would make GENT a "fallen angel" and would weigh on its USD bond prices. For the MYR bonds, the relevant rating is RAM's AA1. Even a one-notch cut there would leave them well inside investment grade on the domestic scale.

Financial health check

GENT's credit metrics are weaker than a year ago but not broken. Cash still covers short-term debt almost twice over, and interest cover stays above 3 times.

Table 2: Selected Genting Berhad ratios

Leverage is the main concern. Net debt/EBITDA rose from 2.0x to 3.7x, driven by the GENM offer, the New York casino licence fee (USD500 mil) and Singapore expansion capex. Capital commitments not yet spent were RM41.4 bil at June 2026. RM15.0 bil of this is already contracted, and RM12.6 bil is earmarked for building out the RWNYC casino.

Hence, we expect capex to stay heavy and leverage to ease only slowly, through 2028. That said, the downside is bounded. Only RM15.0 bil is contracted while the other RM26.4 bil is approved but not yet contracted, so it is more flexible. Even if all RM41.4 bil were spent and fully debt-funded, debt would be about 0.70x tangible assets once the new assets it builds are counted, and about 1.03x even if they are ignored, before any cash generated in the meantime.

Liquidity is the main comfort. Short-term debt rose to RM9.9 bil at June 2026 as 2027 maturities moved inside 12 months, including the remaining USD618 mil of the Jan-2027 notes. Genting has been dealing with these early. It bought back USD882 mil of those notes in May using the proceeds of new perpetual securities. The USD300 mil Empire notes due Nov-2026 were repaid on 2 July from a new USD2.0 bil secured facility, which also refinanced the USD755 mil New York loan and funds further RWNYC spending. GENT also held RM17.6 bil of cash plus RM1.2 bil of liquid financial assets.

Asset backing is solid. Counting only hard assets, stripping out goodwill, casino licences, right-of-use assets and deferred tax assets, GENT's tangible assets of RM86 bil still cover all its liabilities 1.47 times, and debt is 55% of those assets.

Where the earnings come from

Malaysia carried group earnings in 1H2026, while Singapore weakened and the US improved as the New York casino ramped up. Group adjusted EBITDA was RM3.94 bil, down 3% year on year, partly because a stronger ringgit shrank overseas earnings.

Table 3: Business segments in 1H26

Three points stand out for bondholders:

•         Malaysia is steady. Resorts World Genting grew revenue and held its margin above 40%, despite higher payroll costs.

•         Singapore is mid-transformation. Resorts World Sentosa's 1H2026 adjusted EBITDA fell 15% in ringgit terms. Management attributes this to lower gaming revenue and a stronger ringgit, partly offset by growing non-gaming revenue. It reported improvement in 2Q2026 in local-currency terms, and expects upgrades to the hotels, casino and restaurants to roll out over 2027–28, ahead of the RWS 2.0 transformation completing in 2030. It is still GENT's second-largest earner.

•         The US is turning. US & Bahamas adjusted EBITDA rose 62% to RM593 mil in 1H2026. RWNYC opened its full commercial casino in April 2026, and Las Vegas benefited from more high-end play and conventions, with hotel occupancy at 89.7% (from 81.3% in 1H2025). Margins are still thin at about 16%, against about 41% in Malaysia, as New York carries higher operating and payroll costs. In July 2026, management broke ground on RWNYC's next phase, which will turn the Queens site from a casino into a full integrated resort with hotel, entertainment and hospitality offerings. This build-out accounts for RM12.6 bil of the group's capital commitments and is funded partly by the new USD2.0 bil facility. Hence, there is still upside to be earned.

Non-gaming businesses (plantation, power, oil & gas) contribute about 17% of operating EBITDA, which cushions swings in gaming.

Risks to watch

•         A cut to junk. GENT already sits at the lowest investment-grade rating with S&P, Moody's and Fitch. One more notch down from any of them would make it sub-investment grade with that agency. That would mainly weigh on USD bond prices; the MYR bonds are rated by RAM on the domestic scale.

•         A slower New York ramp-up. RWNYC's full commercial casino only opened in April 2026. Management points to higher operating and payroll costs and says it is still optimising the cost structure. With the next phase now under construction, returns on the RM12.6 bil build-out depend on the ramp-up going to plan.

•         Rights issue execution. It still needs shareholder approval, and the underwriting is to be finalised before pricing.

Our view

We remain comfortable with the three GENT bonds on our platform, even after a difficult 2025–26 for Genting Berhad. Leverage has risen and the rating agencies have turned more cautious. Even so, GENT is still investment grade with all four agencies, holds RM18.8 bil of cash and liquid funds against RM9.9 bil of debt due within a year, and its controlling shareholder is putting in fresh equity through a RM1.25 bil rights issue.

New investors may consider the GENTMK 4.18% 08Nov2029 (MYR), which offers a 4.66% YTW for a 3-year tenor. For USD exposure, the GENTMK 4.25% Jan2027 matures in about 3 months, so its 4.99% YTW offers little for the short holding period. Investors can instead consider FWDGHD 5.252% 22Sep2030 (USD) and PETBRA 5.600% 03Jan2031 (USD), which offer YTW of 6.01% and 5.86% respectively, with remaining tenors of about 3 to 4 years.

FWD Group: Stronger growth, sharper earnings, healthier credit in FY25

Credit Update: Attractive USD yields of 5-6% offered by Iran conflict beneficiary-Petrobras

Table 4: Genting Berhad bonds (under our coverage)

Conclusion

GENT is a weaker credit than a year ago and the rating agencies are right to flag it. However, we believe it is not a distressed one. It has deep cash reserves, a diversified business led by a dependable Malaysian franchise, a refinancing plan already in motion and a controlling shareholder willing to inject equity. Hence, we stay comfortable with Genting bonds on our platform.