S&P rates Lottomatica notes B

S&P said it rated Lottomatica SpA’s planned €350 million in new senior secured notes due 2027 B with a 3 recovery rating. The agency also affirmed the B rating on its €1.215 billion of senior secured notes due 2025 and the CCC+ issue rating on the €400 million senior secured payment-in-kind (PIK) notes issued by Gamma Bondco due 2026.

Lottomatica plans to use the proceeds for future acquisitions.

“Despite the likely high cost of the new debt, Lottomatica and its shareholders aim to pursue strategic bolt-on opportunities, leveraging on the group's growing earnings base. The proceeds will be held in escrow and released only to pursue strategic acquisitions. We understand the group has already identified potential targets, ranging from small bolt-ons to transformative acquisitions, and is currently in advanced diligence and negotiation with select midsize targets,” S&P said in a press release.

The agency noted the added debt will push Lottomatica’s S&P Global Ratings-adjusted leverage to 5.2x (excluding any EBITDA contribution from planned M&A), compared with 4.5x in its previous base case,

The outlook is stable.

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