2007-10-23 01:38 (New York)
By Denise Kee
Oct. 23 (Bloomberg) -- Genting International Plc, a unit of Asia's biggest casino operator by market value, is seeking to borrow a record S$3.2 billion ($2.2 billion) to fund a casino resort in Singapore, three people with knowledge of the transaction said.
The overseas unit of Kuala Lumpur-based Genting Bhd. is adding to S$2.17 billion raised in a rights offer in August, andS$450 million of convertible bonds it sold in April to partly fund the resort.
Genting International's loan will push lending to Asia's casino industry to about $9.1 billion, more than double the total for last year, according to data compiled by Bloomberg. Lending to the region's industry is set to grow as countries including Japan consider joining Singapore in lifting bans on casinos.
``There are quite a few countries in Asia where gambling is banned,'' said Harsh Agarwal, a credit analyst with LehmanBrothers Holdings Inc. ``If more countries legalize gambling, we should see an increase in bank lending for casinos.''
Las Vegas Sands Corp., the world's largest casino operator by market value, hired eight banks last month to arrange a loanof about S$5 billion for its Singapore gaming resort.
Genting International's loan will be a record for the Singapore-listed company. The gaming operator has yet to pick arrangers, said the people, who declined to be identified because the information is private.
Tan Hee Teck, chief executive officer of Resorts World at Sentosa Pte, Genting International's S$5.2 billion casino project in Singapore, didn't return calls to his office today.
`History in Casinos'
The regulated gambling market in the Asia-Pacific region is expected to expand 15.7 percent a year to $30.3 billion in 2011, according to PricewaterhouseCoopers LLP. The region will replace Europe, the Middle East and Africa as the second-biggest gaming market after the U.S. by 2011, PricewaterhouseCoopers says.
Genting International will be building the casino on Sentosa island, known for its golf courses and beaches. The resort will include Southeast Asia's first Universal Studios theme park. Singapore's government lifted a four-decade ban on casinos two years ago and issued licenses to GentingInternational and Las Vegas Sands.
The Malaysian company said last year that its planned resort in Singapore could draw 10 million tourists a year by2015.
``Bankers will take a lot of comfort in that Genting does have a history in casinos,'' Hong Kong-based Agarwal said in a phone interview. ``Its Malaysia casino is doing quite well. Theywill also draw comfort in how well Macau is doing and howMalaysia is doing well.''
The parent company of Genting International, runs casino-resorts in Malaysia. Genting International also owns the U.K.'s biggest casino-operator, Stanley Leisure Plc. The Kuala Lumpur-based gaming operator has a credit rating of BBB+ from Standard& Poor's Corp., and Baa1 from Moody's Investors Service, the third-lowest investment grade.
--Editor: Unwin (net/lcc/phl/net/lcc)
To contact the reporter on this story:Denise Kee in Singapore at +65-6212-1514or Dkee2@bloomberg.net
To contact the editor responsible for this story:Netty Ismail in Singapore +65-6212-1106 ornismail3@bloomberg.net.
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