Moody’s: negative outlook for company
Affinity Gaming, which operates 11 casinos in Nevada, Colorado, Missouri and Iowa, revealed in a filing with the Securities and Exchange Commission earlier this month that it expects a default of its senior secured credit agreement “due to non-compliance with certain financial covenants,” the Las Vegas Sun reported.
Affinity owns Silver Sevens located off the Las Vegas Strip as well as three casinos in Primm, Nevada. The company said it is hoping to resolve the issue quickly.
“We are working with our advisors and lenders to reach a solution to this matter, which solution may include an amendment, waiver or refinancing,” Affinity said in the SEC filing. “We are, and expect to remain, current on all obligations, including those under both our senior secured credit facility and our senior unsecured notes due 2018.”
As part of the filing, Affinity informed its investors that revenues for the quarter that ended June 30 would be between $95.6 million and $99.4 million, compared to $100.3 million in the same quarter a year earlier, the Sun reported. Cash flow was anticipated to fall between $12.5 million and $13 million, compared to almost $18 million in the second quarter of 2013.
Affinity lost $900,000 due to a breach of its customer database. The company said information about credit and debit cards seems to have been uncompromised.
After the filing, Moody’s Investor Services gave Affinity a negative rating outlook on the company’s debt. Analyst Keith Foley said the downgrade reflected Affinity’s “steady decline in earnings and corresponding rise in leverage.”
Private equity firm Z Capital of Illinois is Affinity’s largest shareholder with a 30.5 ownership stake in the company. Connecticut-based hedge fund Silver Point Capital owns 24.9 percent.
