Fitch Rates GOHL's USD Notes Final 'A-'

(The following statement was released by the rating agency) HONG KONG/SYDNEY, January 24 (Fitch) Fitch Ratings has assigned GOHL Capital Limited's USD1bn 4.25% guaranteed notes due 2027 a final 'A-' rating. GOHL Capital Limited is a funding vehicle that is wholly owned by Genting Overseas Holdings Limited (GOHL; A-/Stable). 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. The assignment of the final rating follows the receipt of documents conforming to information already received. The final rating is in line with the expected rating assigned on 11 January 2017. GOHL's parent, Genting Berhad (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. KEY RATING DRIVERS Parent and Subsidiary Linkage: GOHL's rating and the Stable Outlook are 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 (GENS, A-/Stable). Genting has demonstrated its support to GOHL by exercising management control. Strong Market Position: 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 EBITDA in 2015. Palm oil plantations accounted for 5%, energy 4% and property, investment and others for the balance. Stable Non-Gaming Revenue: Singapore's tourist arrivals recovered by 10% from January to August 2016, following falling numbers in 2015. GENS' non-gaming revenue exhibited greater stability than its VIP business. GENS' hotels have always registered over 90% occupancy, a trend Fitch expects to continue based on improving tourist arrivals. Sufficient Dividend Coverage: Fitch expects GOHL to receive sufficient dividends from GENS to cover the interest expense on its US dollar notes by over 1.5x. Fitch forecasts GOHL to generate SGD650m-750m in EBITDA annually in 2016-2018, less associate and minority interests (2015: SGD845m). 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. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for GOHL include: - Annual gaming revenue falling by 10% in 2016, then increasing by 2% in 2017-2018 - Overall annual revenue falling by 7% in 2016, then increasing by 2% in 2017-2018 - Operating EBITDAR margin above 34% over 2016-2018 (2015: 38%) - Annual dividend payout by GENS to GOHL at SGD90m-100m RATING SENSITIVITIES Developments that may, individually or collectively, lead to negative rating action on GOHL's rating include: - Weakening ties between GOHL and Genting will result in GOHL's rating being notched down from its parent's rating. - If there is any downgrade of Genting's rating, GOHL's rating will be downgraded accordingly. Developments that may, individually or collectively, lead to negative rating action on Genting's ratings include: - Net financial leverage, as measured by the ratio of net adjusted debt/operating EBITDAR less minority interest, being sustained above 1.0x. - Weakening of competitive position due to regulatory action in any of the markets Genting operates in. - Sustained deviation from Genting's practice of maintaining a net cash position, especially in view of its development pipeline and expansion into new jurisdictions. Fitch does not envisage positive rating action, as upside potential to Genting's ratings is limited by the discretionary nature of gaming expenditure incurred by patrons and the cyclicality and capital intensity of the gaming business. LIQUIDITY Ample Liquidity: GOHL had SGD5.0bn of cash as at end-December 2015, which was sufficient to cover its short-term debt of SGD164m and long-term debt of SGD1.46bn. Contact: Primary Analyst Rebecca Tang Associate Director +852 2263 9933 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central, Hong Kong Secondary Analyst Vicky Melbourne Senior Director +61 2 8256 0325 Committee Chairperson Kalai Pillay Senior Director +65 6796 7221 Date of Relevant Rating Committee: 11 January 2017 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com. Applicable Criteria Criteria for Rating Non-Financial Corporates (pub. 27 Sep 2016) https://www.fitchratings.com/site/re/885629 Additional Disclosures Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1018044 Endorsement Policy https://www.fitchratings.com/regulatory ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 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