S&P lowers AP Gaming debt

S&P said it lowered the issue-level rating on AP Gaming Holdings LLC's senior secured credit facility to B from B+ following the company's announcement that it intends to issue $65 million of incremental term loan debt to fund an acquisition.

The agency also revised the recovery rating to 3 from 2, reflecting a forecast for meaningful (50%-70%; rounded estimate: 60%) recovery for lenders in a payment default.

The company plans to use proceeds from the incremental term loan to fund the acquisition of certain assets from another gaming equipment supplier, to fund transaction fees and expenses, and to add cash to the balance sheet.

S&P said the B corporate credit rating and negative outlook on AP Gaming are unchanged by the planned acquisition and associated debt raise because it expects the acquisition will be financed at a multiple that is lower than the agency’s forecast for adjusted leverage in 2017.

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