Research Update: AP Gaming Holdings LLC Outlook Revised To Stable From Negative On Improving Metrics And Refinancing; New Debt Rated

U.S.-based gaming equipment provider AP Gaming Holdings LLC plans to use the proceeds from a new first-lien term loan, along with cash on hand, to refinance its existing capital structure and repay approximately $40 million of debt. The company has demonstrated a steady recovery in its operating performance over the past year, including a continued sequential improvement in its equipment sales, and we anticipate its international installed base will likely support increasing EBITDA through 2022 and into 2023. As such, we forecast its S&P Global Ratings-adjusted leverage could decrease to the mid-4x area in 2022 while it increases its free operating cash flow (FOCF) to debt to about 5%. Therefore, we revised our outlook on AP Gaming to stable from

...- U.S.-based gaming equipment provider AP Gaming Holdings LLC plans to use the proceeds from a new first-lien term loan, along with cash on hand, to refinance its existing capital structure and repay approximately $40 million of debt. - The company has demonstrated a steady recovery in its operating performance over the past year, including a continued sequential improvement in its equipment sales, and we anticipate its international installed base will likely support increasing EBITDA through 2022 and into 2023. As such, we forecast its S&P Global Ratings-adjusted leverage could decrease to the mid-4x area in 2022 while it increases its free operating cash flow (FOCF) to debt to about 5%. - Therefore, we revised our outlook on AP Gaming to stable from negative and affirmed our 'B' issuer credit rating. At the same time, we assigned our 'B' issue-level rating and '3' recovery rating to its proposed $615 million credit facility, which comprises a $40 million revolver due 2027 and a $575...

Research Update