S&P trims Affinity Interactive

S&P said it lowered its ratings for Affinity Interactive and its senior secured notes due in 2027 to B- from B.

“We expect Affinity's leverage to remain elevated above 6.5x through 2024. The downgrade reflects our expectation for sustained leverage exceeding 6.5x, caused by weakened operating performance, and a downward revision to our EBITDA forecast through 2024.

“Affinity's operating performance in 2023 was below our previous base-case expectations as a combination of high gas prices, renovations of its Midwest properties, and weather-constrained visitation. At the same time, higher-than-expected labor, insurance, and utility expenses compressed EBITDA margin approximately 550 basis points below our base case,” S&P said in a press release.

The agency said it expects a relatively unchanged EBITDA margin in 2024 compared to 2023. “As a result, we do not believe the company will reduce leverage below the mid-7x to 8x area in 2024 and EBITDA interest coverage of 1.5x-2x.

The outlook is stable.

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