New Issue: Genting Overseas Holdings Limited issues new NC5.5 SGD perpetuals at an IPG of 5.65%.

• Genting Overseas Holdings Limited intends to issue a new SGD perpetual with a first call date in 5.5 years (23 December 2031) for accredited and institutional investors only. The initial price guidance (IPG) is 5.65% and will reset every five years thereafter if not redeemed, based on the prevailing SGD 5Y SORA-OIS rate (1.82% as of 17 June 2026) and an estimated initial spread of 3.83%, along with a 25bp step-up in year 10.5 and an additional 75bp step-up in year 25.5. Proceeds are expected to be used for general corporate purposes and refinancing activities. The issuer is rated Baa3 (Moody’s) and BBB (Fitch rating), while this new issuance is expected to be rated Ba2 (Moody’s) and BB+ (Fitch rating).

 
• Investors should note several key structural features of the perpetual. While distributions may be deferred at the issuer's discretion, they are cumulative and must eventually be paid. In addition, a dividend stopper applies at the Parent level (Genting Berhad) but not for the issuer (Genting Overseas Holdings Limited), restricting discretionary shareholder distributions until any deferred distributions have been satisfied.
 
• Although the securities are callable at par after 5.5 years, investors should note that the first step-up only occurs at 10.5 years. The first step-up is small at only +0.25%; there is no guarantee that there will be a call at any of these dates.

  
• Genting Overseas Holdings’ credit support is ultimately derived from the parent group’s (Genting Berhad) diversified portfolio spanning gaming, integrated resorts, plantations, power generation and other investments. Key earnings contributors include Malaysian gaming operations and the group's controlling stake in Genting Singapore. Hence, our analysis is based on Genting Berhad’s financials.

 
• For the first quarter ending 31 March 2026 (1Q2026), Genting Berhad reported revenue of RM6.7b (+2% YoY) and adjusted EBITDA of RM1.8b (-8% YoY), partly impacted by the strengthening of the ringgit against USD, GBP, and SGD. Earnings continued to be supported by resilient visitation trends across its gaming and resort operations, particularly in Malaysia and Singapore. Genting Berhad generated an operating cash flow of RM363m, with a negative free cash flow of approximately RM695m, reflecting elevated development capital expenditure on its New York integrated resort and ongoing asset enhancement initiatives at Resorts World Sentosa (RWS). Free cash flow is expected to improve as these development projects are completed and capital expenditure normalises. Looking ahead, management expects continued recovery in the international travel and tourism industry, underpinned by new attractions at RWS (Singapore Oceanarium, Minion Land), the launch of full-scale commercial casino operations at Resorts World New York City, and new leisure offerings at Resorts World Genting.

• From a credit perspective, Genting Berhad maintains a relatively conservative credit profile compared with many regional gaming and leisure peers. As of 31 March 2026, total debt stood at approximately RM43.5b, against cash and equivalents of RM17.4b, yielding a net debt of RM26.1b. We note that near-term debt obligations over the next twelve months stand at RM11.7b, comfortably covered by Genting Berhad’s cash on hand. Further out, the group’s debt maturity profile is well-distributed with approximately 24% of total borrowings due after 5 years. Leverage remains manageable with net debt/equity at 0.56x, while trailing twelve-month (TTM) interest coverage (TTM EBITDA / TTM interest expense) is healthy at 3.6x. Looking ahead, we expect Genting Berhad to maintain its decent credit profile as global travel demand continues its steady recovery, with scope for improvement once its development projects are completed.

 
• Our analysis below takes the 5.65% IPG as our reference, though the final price guidance (FPG) is likely to come in below the 5.65% IPG level. In Table 1 below, we compare these new perpetuals against the recently issued perpetual by Hotel Properties Limited. We stress that this is not a like-for-like comparison given Genting’s gaming operations business. In general, we note that Genting’s new perpetual will offer a 100+bps in yield pickup compared to HPL’s perpetual.

Table 1: Bond Comparison

Disclosure: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a NIL position and the analyst who produced this report holds a NIL position in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.