Casino operator Genting Malaysia Bhd has issued MYR2.6 billion (US$644.3 million) in debt notes as the company seeks more funds for its property and gaming resorts projects. In a regulatory filing, Genting announced on Wednesday that it HAD issued medium term notes through its unit Genting Malaysia Capital Bhd. The notes were issued in three tranches, according to the casino operator. Tranche one, which has a five-year tenor and 4.98 percent coupon, is worth MYR1.4 billion ($346.9 million) while the second tranche, which has a 10-year tenor and 5.30 percent coupon, is valued at MYR$750 million ($185.8 million).
The last tranche is estimated to be around MYR450 million ($111.5 million) and has a 15-year tenor and 5.58 percent coupon. Genting has tapped Maybank Investment Bank Bhd as the joint lead arranger for the debt note issuance. According to the Malaysian casino operator, the proceeds from the medium term notes will be used for operating expenses, capital expenditure, investment, refinancing, working capital requirements and/or general funding requirements.
“At first glance, we gather that Genting Malaysia is just raising more medium-term notes as debt financing is still relatively cheap,” Maybank analyst Samuel Yin Shao Yang said in a note.“That said, we understand that with more equity financing saved, this will likely pave the way for more dividends this year.” In May, Genting reported that its net profit rose to MYR342.1 million ($86 million) compared to MYR323.9 million ($81.4 million) in the prior-year period, with its flagship integrated resort Genting Malaysia leading the revenue rally.
The quarter was boosted by the opening of new facilities and attractions under the Genting Integrated Tourism Plan (GITP). Tourist arrivals at Genting Malaysia grew by 26 percent to 6.5 million while Resorts World Genting’s hotels maintained a strong 96 percent occupancy rate. Moving forward, Genting BHD expressed confidence in its future growth and the potential of its leisure and hospitality business as the global economy picks up. In Malaysia, Genting said that it remained focused on the on-going development of the GITP.
Genting BHD has been preparing to roll out its new Skytropolis indoor theme park and the highly anticipated Twentieth Century Fox World Theme Park. It also plans to beef up its database marketing efforts to optimize yield management and improve operational efficiencies and service delivery at the resort.
