Moody’s rates AP loans B2

Moody's Investors Service said it assigned B2 (LGD3) ratings to AP Gaming I, LLC's $30 million senior secured revolving credit facility due 2022 and $450 million senior secured first-lien term loan due 2024 and affirmed the company’s corporate family rating at B3, probability of default rating at B3-PD and speculative-grade liquidity rating at SGL-2. The outlook is stable.

Proceeds from the proposed term loan will be used to repay the company's first-lien term loans 2020, of which $410 million is currently outstanding; to repay outstanding seller notes totaling $15 million and to increase balance sheet cash by about $14 million.

The agency said the ratings affirmation considers that even as total funded debt and leverage will increase slightly from current levels, AP Gaming will benefit from the proposed transaction, which will extend its debt maturity profile and reduce total interest costs.

Moody’s said AP Gaming's B3 corporate family rating considers the company's high leverage and small size in terms of revenue and EBITDA, both as an absolute number and as compared to its peers.

The rating is supported by the company's significant operating margins and recurring revenue profile along with its growing installed base and earnings, the agency added.

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