{"id":309893,"date":"2024-02-07T12:38:26","date_gmt":"2024-02-07T18:38:26","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=309893"},"modified":"2024-02-08T11:41:12","modified_gmt":"2024-02-08T17:41:12","slug":"full-house-credit-rating-still-low-but-room-for-improvement","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/","title":{"rendered":"Full House Credit Rating Upgrade Unlikely Over Near Term"},"content":{"rendered":"

Full House Resorts (NASDAQ: FLL) is unlikely to earn an upgrade to its speculative credit rating over the near term. That’s because the casino operator\u2019s debt levels are expected to remain elevated.<\/p>\n

\"\"
Full House Resorts’ Silver Slipper Casino in Mississippi. The operator needs to drive leverage lower to earn a credit upgrade. (Image: YouTube)<\/figcaption><\/figure>\n

That\u2019s the take of Moody\u2019s Investors Service, which downgraded Full House\u2019s speculative grade liquidity rating to SGL-3 from SGL-2. Moody\u2019s reiterated a corporate credit grade of \u201cCaa1\u201d with a \u201cstable\u201d outlook on Full House.<\/p>\n

That\u2019s one of the research firm\u2019s lowest ratings and implies elevated risk of default. While Moody\u2019s lauded Full House\u2019s increasingly diverse geographic footprint, the ratings agency noted the gaming company\u2019s debt\/earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio is poised to remain high for the foreseeable future.<\/p>\n

Moody’s expects that Full House’s Debt\/EBITDA will remain above the upgrade trigger of 6.0x in the next 12 to 18 months because it will take longer for the Chamonix Casino Hotel in Cripple Creek, Colorado to mature due to opening delays primarily caused by construction labor shortages.\u201d<\/strong><\/p><\/blockquote>\n

Chamonix opened in December<\/a>. Not only is the new casino hotel framed as the most posh in Cripple Creek, it\u2019s expected to be one of the largest drivers of EBITDA and revenue growth in the Full House portfolio as it ramps up.<\/p>\n

Full House Can Reduce Leverage<\/h2>\n

At the end of the third quarter, Full House had $450 million in debt, comprised of senior secured notes due in 2028. That compared with cash on hand of $84 million.<\/p>\n

\n

While that debt burden is more than double the regional casino firm\u2019s market capitalization of $163.94 million, EBITDA contributions from Chamonix and The Temporary at American Place<\/a> in Waukegan, Ill. potentially diminish the risk of issuer default. That scenario could improve when the permanent American Place comes online.<\/p>\n<\/div>\n

\u201cThe stable outlook reflects Moody’s expectation that Full House’s earnings will continue to improve in the next 12 to 18 months. Moreover, the company will generate positive free cash flow adequate to cover its fixed charge coverage while it gradually reduces leverage,\u201d added Moody\u2019s.<\/p>\n

In addition to American Place and Chamonix, Las Vegas-based Full House runs a pair of gaming properties in Nevada, one in Indiana, Bronco Billy\u2019s in Cripple Creek, and the Silver Slipper in Mississippi.<\/p>\n

Full House’s Credit Rating Better\/Worse<\/h2>\n

There\u2019s little room for the downside for Full House\u2019s credit rating. But a downgrade could come if the operator sees its liquidity become constrained, or if its debt\/EBITDA ratio swells beyond 10x.<\/p>\n

Conversely, while an upgrade isn\u2019t likely to materialize soon, it\u2019s not a far-flung concept if the gaming company can keep debt\/EBITDA around 6x or lower while improving its free cash flow position.<\/strong><\/p>\n

\u201cThe company will also need to generate positive free cash flow, which will likely come from the successful opening and ramp-up of Chamonix. This will require Full House to hire enough casino hotel staff while being able to attract the expected level of casino hotel visitation,\u201d concluded Moody\u2019s.<\/p>\n","protected":false},"excerpt":{"rendered":"

Full House Resorts (NASDAQ: FLL) is unlikely to earn an upgrade to its speculative credit rating over the near term. That’s because the casino operator\u2019s debt levels are expected to remain elevated. That\u2019s the take of Moody\u2019s Investors Service, which downgraded Full House\u2019s speculative grade liquidity rating to SGL-3 from SGL-2. Moody\u2019s reiterated a corporate […]<\/p>\n","protected":false},"author":46,"featured_media":136534,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,86430,86438,86431],"tags":[81897,81903,86455,86457,87734],"acf":[],"yoast_head":"\nFull House Credit Rating Still Low, But Room For Improvement<\/title>\n<meta name=\"description\" content=\"Full House Credit Rating Upgrade Unlikely Over Near-Term.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Full House Credit Rating Still Low, But Room For Improvement\" \/>\n<meta property=\"og:description\" content=\"Full House Credit Rating Upgrade Unlikely Over Near-Term.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-02-07T18:38:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-02-08T17:41:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/05\/ss.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/\",\"url\":\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/\",\"name\":\"Full House Credit Rating Still Low, But Room For Improvement\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/05\/ss.jpg\",\"datePublished\":\"2024-02-07T18:38:26+00:00\",\"dateModified\":\"2024-02-08T17:41:12+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Full House Credit Rating Upgrade Unlikely Over Near-Term.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/full-house-credit-rating-still-low-but-room-for-improvement\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/05\/ss.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/05\/ss.jpg\",\"width\":1280,\"height\":720,\"caption\":\"Full House Resorts' Silver Slipper Casino in Mississippi. 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