AP Gaming Holdings LLC

The stable outlook reflects our expectation for our measure of adjusted leverage to improve to the mid- to high-3x area through 2020, which provides sufficient cushion relative to our 5x leverage threshold to absorb the impact of potential modest operating underperformance, small tuck-in acquisitions, or modestly higher growth-related capital spending. We could consider lower ratings if AP Gaming sustained adjusted leverage above 5x. This could occur if AP Gaming underperformed our forecast for 2020 adjusted EBITDA by about 25%, if the company pursued a leveraging transaction, or if the company made meaningful investments in growth-related capital expenditures that we did not believe would produce returns sufficient to reduce leverage within a few quarters. We could consider higher ratings if we

...We expect adjusted leverage to continue to improve through EBITDA growth, but remain in the high-3x area through 2020. We expect adjusted leverage to improve to the high-3x area by 2020, primarily through EBITDA growth. We expect good EBITDA growth through 2020, because of continued demand for AP Gaming's newer cabinets and penetration into new markets and continued modest growth in revenue per unit in the company's installed base due to replacing lower-performing games with higher-performing ones. We believe, however, that the company would use excess cash to do small tuck-in acquisitions and invest in expanding its installed base and would maintain adjusted leverage above the mid-3x area. We expect the company to use discretionary cash flow for continued investment in the portfolio and small tuck-in acquisitions. We expect the company to generate modest levels of discretionary cash flow going forward. We believe the company will use it to continue to invest in its leased base and expand...

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