S&P rates Lowen Play notes CCC+

S&P said it gave CCC+ ratings to Dice Acquico GmbH, the new parent of Lowen Play GmbH, and the group's €258 million reinstated senior secured notes, issued by Safari Holding Verwaltungs GmbH. The recovery rating on the notes is 3, indicating a 50%-70% (rounded estimate: 60%) recovery in default.

The agency also assigned CCC- issue and 6 recovery ratings to the new PIK notes issued by Dice Midco Sarl. The 6 recovery rating indicates negligible recovery (rounded estimate: 0%) in default.

Concurrently, S&P boosted Safari Beteiligungs GmbH to CCC+ from SD in line with the new parent, and then withdrew the rating. The outlook at time of withdrawal was negative.

Safari started a restructuring process in December. The new ratings reflect the restructuring, the agency said.

“We expect the group will increase revenue to around €200 million–€220 million, but still not to the €283 million achieved in 2019 given the significant reduction in the number of amusement with price (AWPs) machines in Germany to 7,357 in 2021 from 8,562 in 2019. We forecast that adjusted EBITDA margins will recover to around 30% (2019: 41.7%) following the easing of lockdowns and we expect S&P Global Ratings-adjusted leverage to fall to around 8.5x-9x in 2021 (6.3x–6.8x excluding the PIK notes),” S&P said in a press release.

The outlook is negative, indicating a potential downgrade if the group underperforms over the next 12 months, the agency warned.

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