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Investing.com -- Moody’s Ratings has downgraded Genting Berhad (KLSE:GENTING) and Genting Overseas Holdings Limited to Baa3 from Baa2, while lowering Genting Singapore Limited to Baa1 from A3, with a stable outlook for all ratings.

The rating agency also downgraded the backed senior unsecured rating of notes issued by GOHL Capital Limited, a wholly owned subsidiary of Genting Overseas Holdings, to Baa3 from Baa2. These notes are guaranteed by Genting Overseas Holdings.

According to Moody’s Analyst Anthony Prayugo, the downgrade reflects "GENB’s already weak position due to prolonged deleveraging amid slower than expected earnings recovery, further strained by increased debt to fund its take-over offer for Genting Malaysia Berhad and expected spending following the potential award of a downstate New York City commercial casino license."

On December 1, Genting Berhad completed its take-over offer for Genting Malaysia, acquiring approximately 24% of outstanding shares. The company plans to finance this purchase primarily through debt by raising MYR3 billion ($750 million) via local currency medium-term notes.

On the same day, the New York Gaming Facility Location Board unanimously recommended Genting New York LLC, an indirect subsidiary of Genting Berhad, for one of three downstate NYC commercial casino licenses. Final licensing decisions will be issued by the New York State Gaming Commission by December 31.

Genting New York’s proposal includes a total investment of $5.5 billion, with $1.1 billion already spent on existing capacity and a minimum $500 million license fee. The company has secured $925 million in committed debt financing, contingent on receiving the casino license.

Moody’s expects Genting Berhad’s adjusted debt/EBITDA to rise to 4.9x in 2025 and 4.8x in 2026 before declining to around 4.3x in 2027. Deleveraging will be supported by earnings contribution from its downstate NYC casino, continued growth at existing gaming operations, and LNG production starting in the second half of 2027.

The company faces a debt maturity wall in 2027 when $1.5 billion notes under GOHL Capital Limited are due in January, followed by MYR1.9 billion ($440 million) of borrowings due in March and June.

For Genting Singapore, the downgrade follows the action on its ultimate parent. The company is currently expanding its Resort World Sentosa offerings in phases for a total cost of SGD6.8 billion, with capital expenditure expected to peak at an estimated SGD1 billion per year between 2027 and 2028.

The stable outlook reflects Moody’s expectation that earnings will continue to improve at Genting’s operations in Singapore and Las Vegas, and that the NYC project will be earnings accretive by the second half of 2026.

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