Moody's rates SNAI notes B1

Moody's Investors Service said it assigned a provisional B1 rating to the proposed €110 million senior secured notes due June 2018 to be issued by SNAI SpA and affirmed SNAI's B2 corporate family rating, its B2-PD probability of default rating, the B1 rating on its existing senior secured notes due June 2018 and the Caa1 rating on its senior subordinated notes due December 2018. The outlook remains stable.

Proceeds from the new notes will be used to refinance the existing debt of Cogemat SpA, a company SNAI intends to acquire also via issuance of additional shares.

Moody's views the acquisition of Cogemat as positive for the company's business profile, increasing its scale with the addition of roughly €440 million to the top line, not only strengthening its leadership positions in the sports and horse betting and gaming machine segments but also benefitting from a wider distribution network.

However, the merger will negatively affect the group's EBITDA margin, the agency said, and Moody's remains cautious about future growth prospects owing to SNAI's material exposure to mature or declining segments of the gaming industry and to the uncertainty of the regulatory environment.

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