S&P takes Churchill Downs off watch

S&P said it affirmed all its ratings for Churchill Downs Inc., including the BB issuer rating, removed them from CreditWatch with negative implications and assigned a negative outlook. The agency placed the ratings on watch on March 20.

The outlook reflects the significant weakening in the company's credit measures and the expectation it will have a limited cushion compared to our 4x leverage downgrade threshold in 2021, S&P said.

“The negative outlook also reflects a weak macroeconomic outlook into 2021; a high degree of uncertainty around the effective containment and treatment of the virus, including the potential for additional waves of infections over the coming months to result in tighter operating restrictions across its gaming markets; and the continued implementation of social distancing measures that may impair consumer discretionary spending,” S&P said in a press release.

The agency said it forecasts Churchill Downs’ leverage improving to 4x by the end of next year because it caters to customers who can drive to it.

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