Moody’s might cut Sky Bet

Moody's Investors Service said it placed Cyan Blue Holdco 2 Ltd.’s (Sky Bet) B2 corporate family rating, B2-PD probability of default rating, the B2 rating of its term loan B due 2024 split between £437 million and $500 million and the B2 rating on Cyan Blue Holdco 3 Ltd.’s and Cyan Bidco Ltd.’s £35 million revolving credit facility due 2023 under review for downgrade.

The review follows the April 21 announcement that Stars Group Inc. (B2 under review for downgrade) agreed to acquire Sky Bet valuing the company at $4.7 billion or 12.8 times unaudited adjusted LTM March 2018 EBITDA of £213 million, including expected run-rate cost synergies of $70 million. Out of the $4.7 billion consideration, $3.6 billion will be payable in cash and the remainder in about 37.9 million newly issued common shares.

Stars Group already has $6.9 million of debt financing in place, which will be used to fund the cash portion of the transaction consideration, to refinance the group's existing first-lien term loan and to repay Sky Bet's outstanding debt, which ratings will be subsequently withdrawn upon completion.

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