Fitch Assigns Resorts World Las Vegas Lowest Investment Grade Ranking
The credit rating agency Fitch gave Resorts World Las Vegas a "BBB-" grade, which is the lowest on the investment-grade spectrum. This is one notch lower than what they rated its parent company Genting Bhd. The reason for this lower rating is that the Las Vegas property is considered one of the three key assets in Genting's gaming empire, along with Genting's flagship property in Malaysia and Resorts World Sentosa in Singapore. Fitch predicts that Resorts World Las Vegas will contribute over 20% of Genting's consolidated earnings before interest, taxes, depreciation, amortization, and rent costs (EBITDAR) from 2024.
The $4.3 billion Resorts World Las Vegas, which is the most expensive integrated resort built on the Strip in terms of construction costs, opened in June 2021.
Slower Ramp-Up Than Expected for Resorts World Las Vegas
One criticism of Resorts World Las Vegas is that it has taken a longer time than expected to ramp up. This could be attributed to the fact that its first year of operations was spent dealing with the worst of the coronavirus pandemic. However, excuses aren't enough, especially since the Strip is experiencing strong tourism and high hotel occupancy rates. The Las Vegas Convention Center is also seeing a recovery, and numerous high-profile events are scheduled for the rest of the year.
Resorts World Las Vegas is located at the northwest end of the Strip, where the Stardust Casino used to be.
"We expect RWLV to contribute over 20% of GENT’s proportionately consolidated EBITDAR from 2024," said Fitch. "The 'Medium' operational incentive is driven by the sharing of the Resorts World brand and integrated management decision-making, despite limited operational synergies, as GENT’s casinos operate independently."
Factors Affecting Resorts World Las Vegas Rating
The rating of Resorts World Las Vegas could be improved if Genting's credit rating is upgraded or if there's a strengthening of the legal and operational incentives for Genting to support RWLV. If Genting were to be downgraded or if these incentives were to weaken significantly, then Fitch's rating for RWLV would likely be negatively impacted.
Genting's "BBB" credit rating seems secure for the time being. Its resources are more than sufficient to maintain this grade, which is two notches higher than that of its competitor Las Vegas Sands and equal to Hard Rock International's rating.
(Source: Fitch Ratings Ranks Resorts World Las Vegas Lower Than Parent Company)
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