KUALA LUMPUR (Nov 7): Fitch Ratings has assigned Genting Malaysia Bhd's indirect 49%-owned associate Empire Resorts Inc  a final "B+" long-term Issuer default rating (IDR) following the closing of Empire Resorts' new US$300 million (about RM1.25 billion) senior secured bonds and fresh US$75 million holding company (HoldCo) loan.

In a statement on Friday (Nov 5, 2021), Fitch said it had also assigned a "BB+"/"RR1" rating to Empire Resorts' senior secured notes.

"The rating outlook is stable. The stable outlook reflects the property's recent healthy operating performance and regional gaming's broader solid recovery.

"Empire (Resorts) completed a recapitalisation that included US$300 million of senior secured notes, a new US$75 million HoldCo loan, and a US$150 million preferred equity investment by Genting Malaysia," Fitch said.

Fitch said the IDR reflects an improved stand-alone credit profile (SCP) pro forma for the recapitalisation of Empire Resorts, in which Kien Huat Realty III Ltd owns a 51% stake.

Genting Malaysia is a 49.5%-owned associate of Genting Bhd.

According to Genting Bhd's latest annual report, Kien Huat International Ltd owned a 43.0049% stake in Genting Bhd as at March 15, 2021.

Meanwhile, Empire Resorts' website indicated that the company operates the Resorts World Catskills casino in the US state of New York.

Fitch said there is a lack of diversification with Empire Resorts' operations.

Empire Resorts operates its single property Resorts World Catskills in a competitive market that could be subject to new supply in the medium term, according to Fitch.

"Single-site casino operators are typically rated on the low end of speculative grade, though some can achieve higher ratings if they are in well-protected, monopolistic type regulatory environments and have very low leverage. Empire could become more diversified with its second slots-only casino licence slated for the nearby Orange County, NY (New York).

"However, given the geographic proximity of Orange County, the ratings benefit from opening the additional casino will be somewhat limited.

"Empire (Resorts') SCP is consistent with most other single-site casino operators, which are typically on the lower end of speculative grade. The SCP reflects Empire (Resorts') geographic concentration in a competitive environment subject to new supply risk in the medium term," Fitch said.

At Bursa Malaysia on Friday (Nov 5, 2021), Genting Malaysia's share price closed down two sen or 0.63% to RM3.13 for a market capitalisation of about RM17.68 billion.

Genting Malaysia, which saw 8.01 million shares traded, has 5.65 billion issued shares, according to the company's latest quarterly financial report.