Moody’s gives Ba3 to 888 Holdings, loans

Moody's Investors Service said it assigned a provisional Ba3 corporate family rating to 888 Holdings plc.

The agency also assigned a provisional Ba3 rating to the $600 million six-year senior secured term loan and a provisional Ba3 rating to the $50 million five-year revolving credit facility to be issued by 888 and 888 Financing LLC as co-borrower.

The outlook is stable.

888 will use proceeds from the term loan, together with cash and shares, to fund the acquisition of bwin.party digital entertainment plc (unrated). The revolver is expected to be undrawn at completion. A portion of the term loan will be denominated in euros.

Moody’s said the provisional Ba3 corporate family rating reflects: (a) The highly competitive online gaming industry; (b) the threat of greater regulation and increases in gaming taxes in the countries where the enlarged group operates; and (c) the risk associated with integrating the underperforming bwin.party, including platform and customer migration, business turnaround and the achievement of significant operational efficiencies.

It also reflects the group's increased exposure to the more volatile sports betting segment, as well as to currency fluctuations given the mismatch between the reporting currency, the revenues and the costs, the agency said.

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