Moody's gives Lucky Bucks, loans B2

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Lucky Bucks, LLC. The agency gave a B2 rating to the company's planned $500 million first-lien term loan due 2027.

A B2 was assigned to Lucky Bucks' proposed $50 million five-year revolving credit facility. “Moody's does not expect that the revolver, which will be undrawn at closing, will be drawn during the life of the loan for operating reasons,” the agency said in a press release.

“Lucky Bucks' B2 corporate family rating considers the company's flexible, and asset light business model characterized by limited capital expenditure requirements, a highly variable expense structure, and the contract nature of revenues and earnings. Additionally, there is no material customer concentration. Combined, these factors, along with minimal working capital requirements, result in significant and stable free cash flow relative to EBITDA. Moody's estimates that Lucky Bucks' current portfolio of assets can generate annual cash flow in excess of $50 million after all required debt service, cash taxes and capital expenditures,” the agency said in a press release.

Term loan proceeds will be used to refinance Lucky Bucks' $290 million of debt, pay a $191 million dividend to shareholders including Trive Capital Management, and pay $19 million in fees and expenses. Pro forma cash on the balance sheet is $10 million.

The outlook is stable.

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