Genting Subsidiaries Sell One-billion-dollar Bond to Finance the Construction of Las Vegas Casino
Two subsidiaries of Genting Bhd, Malaysian casino plus hospitality giant, priced on 2nd April one-billion-dollar senior notes to fund Resorts World Las Vegas construction. The resort is a 4-plus-billion-dollar integrated resort and casino currently under construction on the Vegas Strip planned to open its doors to the public in late 2020. This property used to be Stardust’s site until 2007 when it was demolished by Boyd Gaming to start developing its Echelon Place project.
Genting BHD is a management and investment holding company that engages in the leisure, plantation, gambling, hospitality, and property activities. The Genting Group is headquartered in Malaysia in the Wisma Genting, Kuala Lumpur. The company comprises its listed subsidiaries known as Genting Plantations Berhad, the holding company called Genting Berhad, Genting Malaysia Berhad, and Genting Energy Limited, its wholly owned subsidiary.
Genting told Bursa Malaysia, the stock exchange of Malaysia, that RWLV Capital Inc and Resorts World Las Vegas LLC (its wholly-owned subsidiaries) sold a one-billion-dollar bond with a 4.625 percent coupon. The notes are expected in 2029.
According to a banker on the deals of the bond, orders from investors are now 3.8 billion dollars. This shows a strong demand from various investors, including investors from the U.S. S&P gave the deal a BBB+ rating. According to bankers, it’s very rare that a project that is still under development with construction risk and with no cash flow receives an investment-grade rating like this.
On 2 April, Genting stated that all net proceeds from the ten-year bond issue would be used in funding remaining costs that are associated with designing, equipping, financing, construction and the opening of the luxury resort. Also, the funds will be used to pay any transaction fee plus expenses in connection with the offering along with senior secured credit facilities and also for working capital as well as other corporate expenses.
First Resort on The Strip
When it opens its doors, the resort is going to be the first Strip’s integrated resort to open in more than ten years. The property will feature meeting and convention space, spa and wellness facilities, retail space, several food and beverage outlets, 3,400 hotel rooms, and an area for gambling.
Recently, Genting managed to clear a major legal hurdle which could have impeded the opening of this luxury resort in 2020. In 2018, Genting was sued by Wynn Resorts, its rival gambling operator, over the resort’s design.
Wynn Resorts was claiming that Genting’s unfinished luxury resort looked very similar to its Encore and Wynn properties. The flagship hotel plus casino resorts owned by Wynn Resorts are situated just across the street near the resort that is under construction.
The American publicly traded corporation Wynn Resorts Ltd. sued Genting on 5 counts of trademark infringement. They argued that Genting ripped off the signature curved facade of its properties and used it on its resort. Resorts World Las Vegas owner dismissed these claims stating that once finished, the property would look.
The two operators went to court and settled their dispute off. Genting agreed it would change the design of the luxury complex. These changes won’t delay the planned 2020 opening of this property.