S&P views Great Canadian positively

S&P said it revised its outlook for Great Canadian Gaming Corp. to positive from stable and affirmed its B issuer and B+ secured debt ratings. The 2 recovery rating on the debt is unchanged.

“The rating action reflects our expectations that GCGC's leverage will remain below 6x through 2024. GCGC exited 2022 with about 6x leverage compared with our previous expectation of above 7x. With visitation rates returning to normal levels, and the Pickering and Toronto (previously known as Woodbine) properties in the Greater Toronto Area (GTA) bundle ramping up, we expect GCGC's net revenue and EBITDA will show significant growth for the next 18-24 months, with 2023 levels about 20%-30% above 2022 EBITDA,” S&P said in a statement.

Additionally, the agency noted GCGC’s capital spending is winding down over the next 18 months, and it sees the issuer’s free cash flow turning positive in 2024. The free cash flow should help the company drive down its gross debt-to-EBITDA ratio (S&P Global Ratings-adjusted) in the 5x-6x range in the next 12 months.

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