S&P downgrades Bingo

S&P said it lowered its ratings on Bingo (Recycle and Resource Operations Pty Ltd.) and its term loan facilities to B- from B.

Anemic earnings growth has delayed Bingo's deleveraging efforts, and a difficult construction outlook will probably leave leverage above 9x in 2024 and above 7x in 2025, the agency said.

The downgrade reflects the forecast for elevated leverage for the next two years, S&P said.

“We expect Bingo to record negative FOCF in fiscal 2024. Bingo's earnings remain insufficient to cover its capex requirements and debt-servicing costs. In our view, Bingo requires at least A$140 million of EBITDA to service its debt while supporting its maintenance capex requirements. Under our base case, we forecast Bingo attaining this level of EBITDA in fiscal 2025,” S&P said in a press release.

The outlook is negative.

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