The most recent Genting Obscenity....

Genting is the Sugar Daddy of the Mashpee Wampanoag Tribe in Massachusetts, currently salivating to invade Taunton, New York [beyond Aqueduct], and Florida.

Posted solely because of the connection.

Las Vegas revenues have been declining.


Published: Monday May 12, 2014 MYT 2:23:00 PM               
          

Moody's sees Genting's Resorts World Las Vegas project as credit negative

 

KUALA LUMPUR: Moody's Investors Service sees Genting Bhd's proposed US$4bil Resorts World Las Vegas project as credit negative as it would raise it debt level and due to execution risk.

 

The ratings agency said on Monday the project would further increase the group's capital expenditure (capex) over the next two years, which in turn will increase net debt leverage to around 1.0 times from 0.3 times at December 2013.

"Genting is also readying a bid on an integrated casino resort project in Japan, which if won will also increase its leverage," it said in its credit outlook.

Genting expects to begin the 24- to 36-month construction phase in Las Vegas in the second half of this year, building on an 87-acre site along the Las Vegas Strip.

The first phase will involve a more than 100,000-square-foot gaming floor, hotel tower, retail village and showroom.

The Nevada Gaming Control Board has recommended a gaming licence for the project and final approval will be decided by the Nevada Gaming Commission May 22.

Genting bought the site from Boyd Gaming Corporation (B2 stable) in March 2013 for US$350mil.

"With a number of expansion projects already under way, the Las Vegas development increases our estimate of Genting's annual capex to RM7bil to RM11bil (US$2.2bil to US$3.4bil) from RM5bil-RM7bil (US$1.5bil to US$2.2bil) during 2014-16.

"Projected capex includes the renovation of Resorts World Genting, Malaysia, the development of an integrated casino resort on Jeju Island in Korea, other gaming developments across the US and UK, expansion at non-gaming subsidiaries, and maintenance capex across all operations," it said.

Moody's added Genting's higher capex would result in negative free cash flow over the next two to three years and also threaten to weaken the group's leverage.

"We expect consolidated net debt/EBITDA to gradually rise closer to our rating Baa1 parameter of 1.0 times to 1.5 times over the next three years from 0.3 times as of Dec 31, 2013, subject to equity exercises across the group. Genting has outstanding warrants, exercisable over five years, that could raise up to RM5.9bil (US$1.8bil).

"The project also entails execution risk because it is Genting's first foray into Las Vegas, where gaming growth has slowed in comparison to Asia and major resort development has been absent over the past decade. As such, the EBITDA contribution of the initial phases of the project is uncertain," it said.

Moody's pointed out the weakened credit profile arising from the investment in Las Vegas would reduce Genting's ability to make a bid to develop an integrated casino resort project in Japan via its 51%-owned subsidiary, Genting Singapore.

"But if a bid is successful, we expect the project to begin in 2016 with a sizable capex outlay that we estimate would exceed the US$5.6bil development of Resort World Sentosa in Singapore. The scale of this project could further stretch Genting's leverage and prolong the period of weakened credit metrics," it said.




http://www.thestar.com.my/Business/Business-News/2014/05/12/Moody-sees-Genting-Resorts-World-Las-Vegas-project-as-credit-negative/