Genting New York Seeks Support From Malaysian Subsidiary
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  • February 5, 2021
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The impact of the pandemic on the casino industry means that US company Genting New York LLC may soon need to rely on additional funding by its subsidiary Genting Malaysia, according to Fitch Ratings.

The agency recently assigned Genting New York an issuer default rating of “BBB-” with a negative outlook. The same rating and negative outlook was applied to the new corporate bonds that Genting New York has proposed in order to refinance old debt. 

Fitch’s credit rate takes a top-down approach by accounting the strong ties between Genting New York, the operator of Resorts World New York, and its parent company in Malaysia. To date, Genting Malaysia has invested $535 million in Genting New York, and there are a few reasons that confirm their alignment in interests. In 2019, the US company accounted for 20% of Genting Malaysia’s earnings after soaring the pre-pandemic success with a revenue of $900 million. 

Resorts World New York City is a slot-only casino with over 6,500 video terminals and electronic table games, alongside a food court and bars. The venue has also announced upcoming plans for an on-site hotel run by Hyatt Regency. With its strong local market share (being the biggest casino within New York’s proximity) and potential to secure a table game license in 2023, it is the Genting group’s flagship property for the US. Additionally, It is expected to be a significant feeder for the brand new Resorts World Las Vegas, due to open later in 2021.   

Strategically, Genting New York’s success is of significant importance to the growth ambitions for Genting Malaysia in the long run. Similarly, it will also impact the group’s ultimate parent, Genting Berhad, who are facing an elevated capital expenditure and difficulty recovering from the effects of the Covid-19 pandemic. Fitch Ratings considers that there is a moderate linkage in management and control between the companies in its prediction for Genting Malaysia to offer support. 

 

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