Genting Sells Huge Bond to Fund Construction for Las Vegas Resort and Casino

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B Wright Friday, June 14, 2019

We have been watching Genting push forward with their Las Vegas project for several years now, and their latest development comes as great news for anyone waiting to experience what the Malaysian casino powerhouse is set to bring to the table. Although the project has been through some turbulent times, a recent push for major funding comes as a very positive sign. Resorts World Las Vegas is set to open its doors in 2020.

Genting’s new Las Vegas casino, Resorts World Las Vegas, is one of the largest major projects to hit the Strip in more than ten years. The resort and casino, when finished, will have cost Genting more than 4 billion dollars to build and will cover a very large plot of land directly across from the Wynn. Resorts World will host more than 3000 rooms for guests, over 30 restaurants and eateries, and a theatre large enough to seat more than 4000 people. The 175000 sq ft gaming floor is also impressive and will host in excess of 3500 slots and game tables.

$1 Billion-Dollar Bond Investors Stand Behind

What is likely to be the final push for funding to complete Resorts World Las Vegas, subsidiaries of Malaysia’s largest gaming operator, Genting Bhd, sold a bond worth $1 billion. The bond has a coupon set at 4.62% and the bond will mature in ten years.

Interestingly, there is a very high demand within the investment community to see World Resorts Las Vegas succeed. Although there are only bonds up to the $1 billion-dollar mark, bankers have already received preliminary orders totalling almost $4 billion.

The intense investor confidence has enabled the entertainment giant to receive a very good S&P rating of BBB+ which is almost unheard of for projects like this one. For a casino and resort that has yet to open its doors to customers (i.e. income), and which has faced numerous construction hurdles, to receive such a positive rating shows that things are on the right track.

In fact, according to Genting, the additional $1 billion coming in from the bond will fund the final stage of design and development, as well as the related construction costs. The money is also slated to fund the opening of the casino resort, which includes equipment purchases, staffing, and more. At the moment, the projected 2020 opening seems well within reach.

Growing Pains

The recent success of the project has not come without some growing pains. The largest of which came in the form of a law suit. As previously mentioned, Genting experienced a major problem with Wynn Las Vegas when the competitor sued Genting over design similarities with their own casino and resort. The law suit threatened to severely postpone the opening of World Resorts because it would mean a complete redesign of the façade of the buildings.

In the end, Genting settled out of court with Wynn Las Vegas by agreeing to a design change. The design change, while major, however, is not expected to push back the opening date.

The complaints coming from Wynn included design features such as the concave façade of the main buildings, the color scheme, and design features between floors. Genting was reluctant to make any change to their original design because they did not believe that their finished resort and casino would look similar to Wynn’s, but to avoid setbacks and financial loss, Genting decided to make aesthetic changes that would set the two properties apart.

Building Site

The suit would have been especially damaging to the development team responsible for making World Resorts a reality because the structures Genting planned to use were already partially built before they bought the property. Starting from scratch could have meant year added to the projected opening date.

The site where World Resorts is being built is the old home of the famed Stardust Casino. When Stardust shut its doors in 2006, Boyd Gaming stepped in to develop Echelon; however, that was a project that was never completed.

The structures left behind by Boyd Gaming on the 87-acre property at the top of the Strip, were near complete leaving Genting an opportunity to complete and use the existing structures. Genting has since built on the existing property considerably, but original plans were to utilize up to 85% of the unfinished structures left behind by Boyd.

Looking Forward

2020 is not a long time to wait for what seems to be shaping up to one of the biggest things to hit the Strip in a very long time. It is rumoured that upwards of $7 billion will have been poured into World Resorts by the time it is finished making it one of the most expensive projects in recent years as well. With virtually every amenity imaginable and room to expand, it seems that the sky is the limit for this impressive project from the Malaysian casino giants, Genting.