PCI Gaming Authority

Overview Key strengths Key risks Strong market position in the Alabama gaming market. Macroeconomic headwinds could lower gaming demand. Relatively low leverage and strong EBITDA margins compared with regional gaming peers. New development in the competitive Chicago market could increase marketing spend and reduce profitability. Strong cash flow conversion due to low taxes and interest expense. Under our revised forecast, we expect PCI's S&P Global Ratings-adjusted net leverage to increase to around 2.5x in fiscal-year 2023 (ending Sept. 30) from approximately 1.5x at Dec. 2022. This is because of net debt increases due to the Magic City Casino acquisition that closed last month, along with a ramp up in capital spending for its Illinois project that began last year. We

...We expect PCI Gaming Authority (PCI) to maintain adequate cushion in its credit measures despite its recent acquisition and development capital spending in 2023. Under our revised forecast, we expect PCI's S&P Global Ratings-adjusted net leverage to increase to around 2.5x in fiscal-year 2023 (ending Sept. 30) from approximately 1.5x at Dec. 2022. This is because of net debt increases due to the Magic City Casino acquisition that closed last month, along with a ramp up in capital spending for its Illinois project that began last year. We previously expected debt leverage of mid- to high-1x in 2023. Although we forecast a slight drop in...

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