Genting Malaysia Bhd, a unit of Southeast Asia’s largest casino operator by market value, plans to raise RM1.5 billion (US$466 million) in its debut bond sale, two people familiar with the matter said.
The notes will be sold by GENM Capital Bhd, a company set up by Genting Malaysia to sell debt, and is part of a RM5 billion programme, said the people who asked not to be named because the information hasn’t been made public. Five- and 10- year paper will be offered in the week beginning September 29 and there will be an option to increase the sale amount, they said.
Genting Malaysia, ranked at the highest investment grade of AAA by RAM Rating Services Bhd, will use the proceeds of the sale for working capital, the people said. The Kuala Lumpur- based company is tapping the market at a time when corporate borrowing costs in the Southeast Asian nation are near a four- year high after Malaysia’s central bank raised its benchmark interest rate in July.
The average yield on Malaysian top-rated company bonds due 2019 climbed 27 basis points, or 0.27 percentage point, this year to 4.23 per cent, according to a Bank Negara Malaysia index. It reached 4.29 per cent on August 14, the highest since April 2010.
Parent Genting Bhd, which owns leisure, gaming and plantations companies including Resorts World Sentosa in Singapore and Star Cruises in Hong Kong, last sold bonds in June 2012. The yield on its 4.42 per cent notes due 2022 was 4.65 per cent on August 6, the last available figure, down 13 basis points this quarter, data compiled by Bloomberg show. Genting’s 4.86 per cent securities due 2027 yielded 5.10 per cent on September 15, a decline of 29 basis points from June 30.
Genting Malaysia, which bought 6.6 hectares of land in the Bahamas for US$25 million last week, has a market capitalization of RM24.2 billion, according to data compiled by Bloomberg. Its shares dropped 1.8 per cent to RM4.27 as of 11.31am in Kuala Lumpur today, compared with a 0.1 per cent decline in the benchmark FTSE Bursa Malaysia KLCI Index. Genting Malaysia’s stocks have fallen 8.6 per cent since closing at a record high on August 27.-- Bloomberg