{"id":316075,"date":"2024-04-01T16:13:42","date_gmt":"2024-04-01T21:13:42","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=316075"},"modified":"2024-04-02T09:15:38","modified_gmt":"2024-04-02T14:15:38","slug":"ballys-suffers-third-credit-downgrade-this-time-from-fitch","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/","title":{"rendered":"Bally\u2019s Hit with Another Credit Rating Downgrade"},"content":{"rendered":"

Bally\u2019s (NYSE: BALY) accomplished a dubious trifecta as its credit rating has been lowered by a third major ratings agency.<\/p>\n

\"Bally's\"
Bally’s on the Atlantic City Boardwalk. The operator saw its credit rating downgraded by a third ratings agency on Monday. (Image: Bloomberg<\/em>)<\/figcaption><\/figure>\n

On Monday, Fitch Ratings downgraded the regional casino operator\u2019s credit grade to \u201cB\u201d from \u201cB+\u201d, citing increasing leverage. The research firm has a \u201cnegative\u201d outlook on that rating, which moved deeper into noninvestment-grade territory.<\/p>\n

The downgrade reflects the relatively high leverage that is above Fitch’s rating downgrade sensitivities and are now expected to be higher for longer; execution risk in the financing and development of the Chicago development; as well as other potential development opportunities,\u201d noted the research firm.<\/p><\/blockquote>\n

The research firm added that Bally\u2019s expansion opportunities, including a planned $1.1 billion casino hotel in Chicago<\/a>, as well as weakness in its North American digital unit could be continued drags on earnings before interest, taxes, depreciation, and amortization (EBITDA).<\/p>\n

Interesting Timing for Another Bally\u2019s Credit Rating Downgrade<\/h2>\n

With the move by Fitch, all three major ratings agencies have lowered Bally\u2019s further into junk status in less than two months. Moody\u2019s Investors Service did so last week<\/a>.<\/p>\n

Downgrades of the gaming company\u2019s credit profile are piling up as it looks to procure $800 million in financing to complete the Chicago integrated resort, implying creditors could demand higher interest rates due to Bally\u2019s lower credit grades.<\/p>\n

\n

Though it\u2019s likely just a coincidence, the Fitch downgrade arrived a day before the scheduled closing of the Tropicana Las Vegas, the operator\u2019s lone Strip venue. The reductions in Bally\u2019s credit grade also arrived as Standard General<\/a>, the company\u2019s largest shareholder, is attempting to acquire the firm for $15 a share.<\/p>\n<\/div>\n

\u201cThe Negative Outlook reflects leverage that the company is operating slightly around Fitch’s 7.0x downgrade sensitivities, which could remain elevated during the Chicago construction period. The Outlook also reflects the uncertain outcome of the offer by Standard General to purchase the remaining shares of Bally’s,\u201d observed Fitch.<\/p>\n

Leverage Problematic for Bally\u2019s<\/h2>\n

As it searches for capital to complete its permanent venue in Chicago, Bally\u2019s is, in the eyes of Fitch, hindered by elevated leverage. The ratings agency estimates the operator\u2019s 2023 earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) leverage to be 7.2x, and that could rise as the Windy City project moves along.<\/p>\n

The proposed Chicago casino development will likely lead to medium-term elevated consolidated leverage metrics through 2026, with gross consolidated adjusted leverage likely remaining outside of Fitch’s sensitivities during construction,\u201d said Fitch.<\/p><\/blockquote>\n

The research firm also noted that there are uncertainties, including persistently high inflation, that could weigh on Bally\u2019s regional casino business while pointing out that, due to the operator\u2019s laggard status in iGaming and online sports wagering, those industries won\u2019t be a \u201cmaterial credit driver in the near to intermediate term.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Bally\u2019s (NYSE: BALY) accomplished a dubious trifecta as its credit rating has been lowered by a third major ratings agency. On Monday, Fitch Ratings downgraded the regional casino operator\u2019s credit grade to \u201cB\u201d from \u201cB+\u201d, citing increasing leverage. The research firm has a \u201cnegative\u201d outlook on that rating, which moved deeper into noninvestment-grade territory. The […]<\/p>\n","protected":false},"author":46,"featured_media":261400,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,32093,86430,86438],"tags":[81903,81966,86455,86457],"acf":[],"yoast_head":"\nBally's Suffers Third Credit Downgrade, This Time From Fitch<\/title>\n<meta name=\"description\" content=\"Bally\u2019s Hit with Another Credit Ratings Downgrade.\" \/>\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\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bally's Suffers Third Credit Downgrade, This Time From Fitch\" \/>\n<meta property=\"og:description\" content=\"Bally\u2019s Hit with Another Credit Ratings Downgrade.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/\" \/>\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=\"2024-04-01T21:13:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-02T14:15:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/bally-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"809\" \/>\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\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/\",\"url\":\"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/\",\"name\":\"Bally's Suffers Third Credit Downgrade, This Time From Fitch\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/bally-1.jpg\",\"datePublished\":\"2024-04-01T21:13:42+00:00\",\"dateModified\":\"2024-04-02T14:15:38+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Bally\u2019s Hit with Another Credit Ratings Downgrade.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/ballys-suffers-third-credit-downgrade-this-time-from-fitch\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/bally-1.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/bally-1.jpg\",\"width\":1200,\"height\":809,\"caption\":\"Bally's on the Atlantic City Boardwalk. 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