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Moody’s cuts Stars facilities, rates facilities B2
Moody's Investors Service said it affirmed Stars Group Inc.'s B2 corporate family rating, B2-PD probability of default rating and stable outlook.
The speculative grade liquidity rating was upgraded to SGL-1 from SGL-2.
In addition, the agency assigned B2 ratings to Stars Group Holdings BV's proposed upsized, amended, extended and re-priced dollar-denominated first-lien term loan due 2025, euro-denominated first-lien term loan due 2025 and proposed $300 million senior secured revolving credit facility due 2023.
The add-ons to the dollar and euro term loan tranches will total $425 million.
The company's existing first-lien term loans due 2021 and revolver due 2019 were downgraded to B2 from B1 reflecting the reduction in second-lien debt cushion. The Caa1 rating on the existing second-lien term loan due 2022 is unchanged. The ratings on these facilities will be withdrawn upon close of the new proposed upsized, amended, extended and re-priced facilities.
Some of the proceeds from the new proposed $425 million term loan add-on, balance sheet cash and $85 million of new common shares to be issued, will be used to fund the previously announced acquisition of 80% of CrownBet Holdings Pty Ltd. and William Hill Australia Holdings Pty Ltd., repay the company's existing second-lien term loan facility ($95 million outstanding), as well as pay related fees and expenses.
"The proposed amend, extend and re-pricing transaction will improve The Stars Group's financial flexibility in that it will repay higher cost second lien debt, push out debt maturities, increase the size of the company's revolver, as well as provide funds for the acquisition," Moody's analyst Adam McLaren said in a news release.
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