KUALA LUMPUR: Fitch Ratings has assigned Genting group's GOHL Capital Ltd's US$1bil 4.25% guaranteed notes due 2027 a final 'A-' rating.GOHL Capital Limited is a funding vehicle, a unit of Genting Overseas Holdings Limited (GOHL; A-/Stable).The international ratings agency said on Wednesday the notes are rated at the same level as GOHL's senior unsecured rating because they will be guaranteed by GOHL and constitute its direct and senior unsecured obligations.GOHL's parent, Genting Bhd (A-/Stable), will enter into a keepwell deed with the issuer and guarantor. The keepwell deed does not constitute a guarantee by Genting of the obligations of the issuer under the notes or the guarantor under the guarantee.Fitch explained GOHL's rating and the stable outlook were equalised with that of its parent in line with Fitch's parent and subsidiary rating linkage criteria.“This is due to GOHL's strong support and operational ties with its parent and our view of GOHL's strategic importance to Genting.“GOHL is the group's holding company, which owns 52.9% of Genting Singapore PLC (A-/Stable). Genting has demonstrated its support to GOHL by exercising management control,” it said.Genting's rating reflects its continued strong market position in the Malaysian and Singaporean gaming markets and meaningful diversification in the palm oil plantation and energy sectors.Genting's leisure and hospitality business, which includes its gaming, hotel and theme-park businesses, accounted for 81% of consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) in 2015.Palm oil plantations accounted for 5%, energy 4% and property, investment and others for the balance.Singapore's tourist arrivals recovered by 10% from January to August 2016, following falling numbers in 2015. Genting Singapore's non-gaming revenue exhibited greater stability than its VIP business.Genting Singapore's hotels have always registered over 90% occupancy, a trend Fitch expects to continue based on improving tourist arrivals.Fitch said it expects GOHL to receive sufficient dividends from Genting Singapore to cover the interest expense on its US dollar notes by over 1.5 times.“Fitch forecasts GOHL to generate S$650mil to S$750mil in EBITDA annually in 2016-2018, less associate and minority interests (2015: S$845mil).“The issuer will open an interest reserve account and ensure the amount in the account is at all times not less than the interest due on all notes outstanding on the next succeeding interest payment date,” it said.GOHL had S$5bil of cash as at end-December 2015, which was sufficient to cover its short-term debt of S$164mil and long-term debt of S$1.46bil.

Source: The Star January 25, 2017 03:49 UTC