Bally’s Corp. received its first-ever “B” rating from Fitch Ratings Company, which cited positive operational results at the company’s properties and a solid internet content arm in Gamesys.
Fitch analysts lauded Bally’s acquisition of Gamesys, writing that it showed “improving diversification within both land-based and digital businesses and healthy underlying operating trends. The ratings also consider adequate liquidity and good discretionary free cash flow, which will support investments within the business, planned [mergers and acquisitions] and project capex.”
Also taken into account was the stated intent of Bally’s management to lower the company’s leverage to 4.5 times equity by 2023, partially through allocation of free cash flow toward debt retirement. “Continued strong operating performance at the U.S. land-based business (including 2020 acquisitions) and Gamesys through the merger integration could also drive the ratings higher.”
Fitch also noted Bally’s geographic diversification in its acquisitions of properties, the latest being Tropicana Las Vegas, which will bring to 16 the number of casinos under the Bally’s umbrella.
“The M&A strategy has diversified cash flows away from the Northeast and has primarily centered around buying underperforming properties at discounted valuations,” Fitch wrote. “Bally’s properties are typically not market leaders and the company has over $200 million of growth cap-ex planned to support competitiveness.”
