Fitch downgrades GVC to BB

Fitch Ratings said it downgraded the ratings for GVC Holdings plc and its secured instruments to BB from BB+. Fitch also downgraded Ladbroke’s senior secured instrument rating to BB from BB+.

“The downgrade is driven by GVC's slower-than-expected deleveraging to levels that would be consistent with a BB+ rating. This is due to a severe impact from the coronavirus outbreak on its retail- and sports- betting divisions, which is only partly offset by online gaming,” said Fitch in a press release.

“We forecast funds from operations (FFO)-adjusted net leverage to exceed BB+ levels at 4.7x for 2021 (and 3.6x for 2022) due to coronavirus disruption. This compares to our prior forecast of 3.7x for 2021 and a sensitivity of below 4x by 2021. GVC remains committed to its long-term net debt/EBITDA target of below 2x, equivalent to FFO-adjusted net leverage of below 3x, while maintaining a progressive dividend policy,” the agency said.

The negative is outlook.

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