S&P lowers Lucky Bucks

S&P said it lowered its ratings on Lucky Bucks LLC and its loans to CCC- from CCC and placed the ratings on CreditWatch with negative implications.

“Lucky Bucks' operating performance continues to deteriorate due to ongoing regulatory enforcement and economic softness, and we believe the company won't meet its near-term mandatory fixed charges. In the third quarter of 2022, further Lucky Bucks location shutdowns resulted from the Georgia Lottery Commission's enforcement of its 50 Percent Rule, as well as general economic softness in the Georgia coin-operated amusement machine market,” S&P said in a statement.

As of Sept. 30, Lucky Bucks had $4.8 million cash and about $5.1 million available under its revolving credit facility.

“We believe the company has insufficient liquidity to meet its ongoing debt obligations due to our expectation of continued EBITDA declines resulting from further machine shutdowns, rising interest rates putting upward pressure on its fixed charges, and a high annual debt amortization of $27.75 million,” the agency said.

S&P warned it could lower Lucky Bucks’ ratings if it breaches its covenant, has a payment default or reports a debt restructuring transaction that is distressed and equivalent to default.

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