Research Update: Italy-Based Gamma Bidco, Parent of Gamenet Group, Assigned Preliminary 'B' Rating; Outlook Negative

Gamma Bidco S.p.A. (Gamma Bidco), immediate parent of Gamenet Group S.p.A., plans to raise €640 million of new senior notes, which it will use in conjunction with cash on the balance sheet to refinance Gamenet's existing senior notes and pay fees. Gamma Bidco additionally intends to raise a new super senior €100 million revolving credit facility (RCF), replacing the existing €85 million RCF issued by Gamenet Group. Although the group has shown positive momentum in the past few weeks as the COVID-19-related lockdowns have been eased, we expect the challenging operating environment will materially affect the group's earnings and in 2020 we expect our adjusted leverage for Gamma Bidco will be about 7x and adjusted free operating cash flow (FOCF)

...- Gamma Bidco S.p.A. (Gamma Bidco), immediate parent of Gamenet Group S.p.A., plans to raise 640 million of new senior notes, which it will use in conjunction with cash on the balance sheet to refinance Gamenet's existing senior notes and pay fees. - Gamma Bidco additionally intends to raise a new super senior 100 million revolving credit facility (RCF), replacing the existing 85 million RCF issued by Gamenet Group. - Although the group has shown positive momentum in the past few weeks as the COVID-19-related lockdowns have been eased, we expect the challenging operating environment will materially affect the group's earnings and in 2020 we expect our adjusted leverage for Gamma Bidco will be about 7x and adjusted free operating cash flow (FOCF) to debt around 5%. - We are assigning our preliminary 'B' issuer credit rating and negative outlook to Gamma Bidco, as well as a preliminary 'B' issue rating and '3'(55%) preliminary recovery rating to the group's proposed new notes. - At the same...

Research Update