Reuters logo
Fitch Assigns GOHL First-Time Rating of 'A-'; Outlook Stable
January 11, 2017 / 5:07 AM / a year ago

Fitch Assigns GOHL First-Time Rating of 'A-'; Outlook Stable

(The following statement was released by the rating agency) HONG KONG/SYDNEY, January 11 (Fitch) Fitch Ratings, Hong Kong, 10 January 2017: Fitch Ratings has assigned Genting Overseas Holdings Limited (GOHL) a Long-Term Issuer Default Rating (IDR) of 'A-' with Stable Outlook and a foreign-currency senior unsecured rating of 'A-'. At the same time, Fitch has assigned GOHL Capital Limited's proposed US dollar guaranteed notes an 'A-(EXP)' expected rating. GOHL Capital Limited is a funding vehicle and wholly owned by GOHL. The notes are rated at the same level as GOHL's senior unsecured rating because they will be guaranteed by GOHL and constitute its direct and senior unsecured obligations. GOHL's parent, Genting Berhad (Genting, A-/Stable), will enter into a keepwell deed with the issuer and guarantor. The keepwell deed does not constitute a guarantee by Genting of the obligations of the issuer under the notes or the guarantor under the guarantee. KEY RATING DRIVERS Parent and Subsidiary Linkage: GOHL's rating and the Stable Outlook are equalised with that of its parent in line with Fitch's Parent and Subsidiary Rating Linkage criteria. This is due to GOHL's strong support and operational ties with its parent and our view of GOHL's strategic importance to Genting. GOHL is the group's holding company, which owns 52.9% of Genting Singapore PLC (GENS, A-/Stable). Genting has demonstrated its support to GOHL by exercising management control. Strong Market Position: Genting's rating reflects its continued strong market position in the Malaysian and Singaporean gaming markets and meaningful diversification in the palm oil plantation and energy sectors. Genting's leisure and hospitality business, which includes its gaming, hotel and theme-park businesses, accounted for 81% of consolidated EBITDA in 2015. Palm oil plantations accounted for 5%, energy 4% and property, investment and others for the balance. Stable Non-Gaming Revenue: Singapore's tourist arrivals recovered by 10% from January to August 2016, following falling numbers in 2015. GENS' non-gaming revenue exhibited greater stability than its VIP business. GENS' hotels have always registered over 90% occupancy, a trend Fitch expects to continue based on improving tourist arrivals. Sufficient Dividend Coverage: Fitch expects GOHL to receive sufficient dividends from GENS to cover the interest expense on its proposed US dollar notes by over 1.5x. Fitch forecasts GOHL to generate SGD650m-750m in EBITDA per annum in 2016-2018, less associates and minority interests (2015: SGD845m). The issuer will open an interest reserve account and ensure the amount standing to the credit of such account is at all times not less than an amount equal to the interest due on all notes outstanding on the next succeeding interest payment date. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for GOHL include: -Annual gaming revenue falling by 10% in 2016, then increasing by 2% in 2017-2018 -Overall annual revenue falling by 7% in 2016, then increasing by 2% in 2017-2018 -Operating EBITDAR margin above 34% over 2016-2018 (2015: 38%) -Annual dividend payout by GENS to GOHL at SGD90m-100m RATING SENSITIVITIES Developments that may, individually or collectively, lead to negative rating action on GOHL's rating include: - Weakening ties between GOHL and Genting will result in GOHL's rating being notched down from its parent's rating. - If there is any downgrade of Genting's rating, GOHL's rating will be downgraded accordingly. Developments that may, individually or collectively, lead to negative rating action on Genting's ratings include: - Net financial leverage, as measured by the ratio of net adjusted debt/operating EBITDAR less minority interest, being sustained above 1.0x. - Weakening of competitive position due to regulatory action in any of the markets Genting operates in. - Sustained deviation from Genting's practice of maintaining a net cash position, especially in view of its development pipeline and expansion into new jurisdictions. Fitch does not envisage positive rating action, as upside potential to Genting's ratings is limited by the discretionary nature of gaming expenditure incurred by patrons and the cyclicality and capital intensity of the gaming business. LIQUIDITY Ample Liquidity: GOHL had SGD5.0bn of cash as at end-December 2015, which is sufficient to cover its short-term debt of SGD164m and long-term debt of SGD1,460m. Contact: Primary Analyst Rebecca Tang Associate Director +852 2263 9933 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central Hong Kong Secondary Analyst Vicky Melbourne Senior Director +61 2 8256 0325 Committee Chairperson Kalai Pillay Senior Director +65 6796 7221 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email:; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: Additional information is available on For regulatory purposes in various jurisdictions, the supervisory analyst named above is deemed to be the primary analyst for this issuer; the principal analyst is deemed to be the secondary. Applicable Criteria Criteria for Rating Non-Financial Corporates (pub. 27 Sep 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1017390 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below