S&P Says Genting Is One Downgrade From Fallen Angel, a Day After Fitch

S&P Global has published a credit FAQ warning that Genting Bhd may not be able to defend its investment-grade rating while pursuing $10.5 billion of expansion in New York and Singapore. Fitch cut the group to the same rung on Monday. It now sits one notch above speculative grade with a negative outlook and, in S&P's words, no more buffer.

• S&P Global says Genting Bhd is at real risk of becoming a fallen angel, the term for an issuer that loses investment-grade status
• The group is rated BBB- with a negative outlook, one notch above speculative grade, and S&P says it has no more buffer for a further downward surprise to operational earnings
• The pressure comes from underperformance at Genting Singapore, Genting New York and Resorts World Las Vegas, against a $5.5 billion investment in Resorts World New York City through 2030 and a $5 billion expansion at Resorts World Sentosa
• Fitch downgraded the group to BBB- from BBB on Monday, forecasting average annual capital expenditure of MYR9.2 billion and negative free cash flow averaging MYR4 billion a year to 2028
• S&P lists possible short-term remedies including selling 15.47 acres of land in Miami, issuing up to a further $1.6 billion of hybrid securities, or reducing dividends

Two Agencies, Two Days, One Rung Above Junk

S&P Global has published a credit FAQ warning that Genting Bhd is at real risk of becoming a fallen angel, losing the investment-grade rating it currently holds by a single notch. The Malaysian conglomerate is rated BBB- with a negative outlook, and the agency's assessment is that downside risks remain elevated.

The report identifies three sources of weakness: Genting Singapore, which operates Resorts World Sentosa, Genting New York on a slower ramp, and Resorts World Las Vegas. Against that, capital expenditure is at what the agency calls extreme highs for the foreseeable future, driven by a $5.5 billion investment in Resorts World New York City through 2030 following the full casino licence awarded last year, and a similar $5 billion expansion at Resorts World Sentosa.

S&P acknowledged improvement. EBITDA performance at both Sentosa and Las Vegas strengthened in the June 2026 quarter, and Resorts World New York City is ramping at a decent rate. It is not yet enough. "We require further visibility on the recovery prospects of the group's key subsidiaries to help us to assess the group's likely overall earnings quality for the next six to 12 months," the agency said, adding that it wants to see several more quarters at New York City and evidence that Las Vegas can sustain its performance, since those could mitigate prolonged weakness in Singapore.

The blunt line is about headroom. "In our view, the group has no more buffer for a further downward surprise to operational earnings," S&P said. "Its credit metrics are diverging further from downside trigger, and as such, making near-term recovery seem increasingly unlikely." A downgrade would follow prolonged earnings weakness without sufficient mitigants, or any unexpected debt-funded acquisition.

The agency was also unusually direct about the tension inside the group's own strategy. It believes management wants to keep the investment-grade rating for reputational and funding-cost reasons, but sees risks over its ability to commit to that, "given persistent results underperformance, and its pursuit of growth at the same time". Some of these issues, it noted, have been running for several years.

The report arrives a day after Fitch Ratings downgraded Genting Bhd's long-term issuer default rating to BBB- from BBB with a stable outlook, citing the same capital spending in New York and Singapore, the slower New York ramp and a gradual recovery elsewhere in the group. Fitch expects proportionately consolidated EBITDA net leverage to stay above 4.0 times for three years, falling below 3.5 times in 2029, with the pace largely dependent on Resorts World New York City. It forecasts average annual capex of MYR9.2 billion, approximately $2.27 billion, between 2026 and 2028, and negative free cash flow averaging MYR4 billion, about $988.7 million, a year.

Fallen Angel Is a Funding Event, Not a Headline

The phrase matters because of who is forced to act rather than what it says about the business. A great many institutional mandates cannot hold speculative-grade paper, so a downgrade below investment grade triggers mechanical selling regardless of any view on Resorts World New York City's ramp. For a group carrying this much capex and this much refinancing, the cost of debt is not a line item, it is the constraint on the expansion plan itself. That is why S&P's list of remedies, land in Miami, hybrids, dividends, is a list of things that raise cash without adding senior debt.

The Problem Is the Overlap, Not the Projects

Individually, none of this is alarming. Resorts World New York City has a full casino licence and is ramping. Sentosa is investing into a recovering Singapore market. Las Vegas improved last quarter. The difficulty is that all three are consuming capital at once while two of the three are also the source of the earnings weakness, so the group is funding its recovery and its expansion from the same strained cash flow. Fitch's numbers put a shape on it: leverage above 4.0 times until 2029, negative free cash flow through 2028.

Both Agencies Are Now Waiting on the Same Building

Fitch says deleveraging depends largely on Resorts World New York City. S&P says it needs several more quarters of ramp there. The group's credit rating has effectively been made a function of one property's performance in a single market, which is a precarious place for a conglomerate with operations across Singapore, Malaysia, the United Kingdom and the United States to have arrived. It also means the next six months of New York numbers will move the rating more than anything management says.

Genting has been here in outline before, when CreditSights flagged heavy capex and rising debt a year ago. What has changed is that the warning is now inside the ratings themselves, and there is one notch left.