S&P: Genting on negative watch

Standard & Poor's said it placed its BBB+ long-term corporate credit ratings on Genting Bhd. on CreditWatch with negative implications following the announcement that Genting International plc, jointly with Star Cruises Ltd. (BB-/negative watch), has won the S$5.2 billion bid to build Singapore's second integrated resort on Sentosa Island.

At the same time, the agency said the BBB+ issue ratings on Prime Holdings (Labuan) Ltd.'s $300 million senior unsecured notes due 2014 and Prime Venture (Labuan) Ltd.'s $300 million senior unsecured notes due 2008, both of which are guaranteed by Genting, also are placed on CreditWatch with negative implications.

The action reflects the potential adverse impact on its financial risk profile if the development of the integrated resort is substantially financed by debt, S&P said.

However, the successful completion of the integrated resort project is likely to have a positive impact on Genting's business risk profile, the agency added.

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