S&P gives Gamma notes B

S&P said it gave Gamma Bidco SpA’s planned €525 million of senior secured notes B issue and 3 recovery ratings. The 3 rating reflects recovery prospects of 60% (rounded estimate).

Concurrently, the agency affirmed its B ratings on Gamma and its subsidiary Gamenet Group SpA and Gamma’s outstanding senior secured notes. S&P revised the outlooks for both companies to stable from negative.

Gamenet will use the proceeds and a €225 million equity injection from shareholder Apollo to pay the first installment due to acquire International Game Technology plc’s Lottomatica. Gamenet will pay the remainder in two tranches of €100 million by December and €125 million by September 2022.

“The outlook is stable because we expect Gamenet will recover from the pandemic over the next 12 months once restrictions are lifted, and successfully integrate Lottomatica, leading to pro forma adjusted leverage of 5.4x–5.7x, funds from operations (FFO) to debt higher than 12%, and negative reported free operating cash flow (FOCF) of €65 million-€85 million in 2021, before a material improvement in 2022,” S&P said in a press release.

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