Genting Bhd (subsidiary issuer): Updated view on Genting complex; upgrade RWLVCA / GENTMK perps to OW

Research evidence excerpt

Genting Bhd (subsidiary issuer): Updated view on Genting complex; upgrade RWLVCA / GENTMK perps to OW

This could cover reported interest expenses of USD39mn and capex of USD7mn during

the quarter. Also importantly, RWLVCA’29 will be the earliest bond maturity within the

Genting complex after the repayment of GENTMK'27 in Jan'27, while all RWLVCA bonds

mature before the first call date of the GENTMK perps. We think Genting has shown

strong commitment to the development of the US market, and management mentioned

previously that it intends to list its gaming, leisure and hospitality business in the US,

ultimately. As such, we see strong incentives and a high likelihood that Genting would

consider providing financial support to RWLV if needed, to maintain its presence in Las

Vegas - one of the largest gaming markets in US and globally. From a valuation

perspective, RWLVCA bonds (BB+ by S&P and BBB- by Fitch) are quoted close to 9%

YTM, >230bp / >40bp wider than the ICE BofA BB / B Asian Dollar High Yield Index at

6.6% / 8.4%. Separately, GENTMK PerpC'31 ($96.8) and PerpC'36 ($96.7) currently offer

7.9% and 8.6% running yields, respectively, wider than many B-rated comparables. Both

are rated sub-IG (Ba2 by Moody’s and BB+ by Fitch), which could limit the impact of

further rating pressure. While concerns around the Singapore earnings trajectory and

future refinancing requirements remain valid, we believe these risks are already well

understood and largely priced in by the market.

Exhibit 1: Relative valuation

RWLVCA bonds and GENTMK perps are trading at the wide end of Asia gaming space

YTM/ YTC (%) Genting bonds Macau gaming bonds

9.0%

RWLVCA 2029 RWLVCA 2031 RWLVCA 2030 GENTMK 8.3 Perp

GENTMK 7.625 Perp

8.0%

MPEL 2032

7.0% SJMHOL 2028 STCITY 2029 MPEL 2033 WYNMAC 2034