S&P upgrades Boyd Gaming

S&P said it upgraded Boyd Gaming Corp. to B+ from B and its issue ratings by a notch.

“The upgrade to B+ reflects our lower leverage forecast, driven by strong EBITDA and cash flow generation despite its casinos operating at lower capacity as a result of the pandemic. Since reopening most of its casinos in the second quarter of 2020, Boyd's cash flow has recovered faster than we previously expected. Boyd reported strong margin improvement in the third and fourth quarters of 2020 as S&P-adjusted EBITDA grew 4% despite facing visitation pressures due to the Covid-19 pandemic that resulted in a revenue decline of about 22% in the second half of 2020,” the agency said in a press release.

S&P said it forecasts leverage to decline to about 5x in contrast to its previous forecast of the low-7x area. “We expect leverage will improve to the mid-4x area in 2022. This provides Boyd ample cushion relative to our 6x leverage threshold for the company at the current B+ rating to withstand some potential further operating volatility,” S&P said.

The outlook is stable.

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