Moody’s cuts Inspired Entertainment

Moody’s Investors Service said it downgraded Inspired Entertainment, Inc.’s probability of default rating to D-PD from Caa1-PD, and the company’s corporate family rating to Caa2 from Caa1.

Concurrently, Moody’s downgraded to Caa2 from Caa1 the ratings on the £220 million equivalent backed senior secured term loan B (£140 million term loan B1 and €90 million term loan B2) and the £20 million backed senior secured revolving credit facility, all borrowed by Gaming Acquisitions Ltd.

Moody’s placed the corporate family and instrument ratings on review for downgrade and changed the outlook to ratings under review for both entities.

“The downgrade of Inspired’s PDR to D-PD reflects the company’s decision not to pay interest payments of approximately £5.7 million and €3.1 million, which were due on April 1, 2020, for its senior secured term loans. The original grace period of three business days has now expired, and therefore Moody’s has determined that the missed payments constitute a default,” the agency said in a press release.

The downgrade to Caa2 reflects the potential for future defaults by the company over the next 12 months, including through the further capitalization of interest or impairments of debt principal, which Moody’s could view as a default through a distressed exchange.

Inspired entered into a forbearance agreement with its lenders to extend the grace period for the April 1 interest due date to 75 calendar days.

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