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Fitch cuts, ups Intralot
Fitch Ratings said it downgraded Intralot SA's long-term issuer default rating to RD from C following the exchange of 2021 notes issued by Intralot Capital Luxembourg SA to new 2025 notes issued by Intralot Inc. with an 18% discount to nominal value, and a partial debt-to-equity exchange of 2024 notes, both of which the agency considers a distressed debt exchange under Fitch's ratings definitions.
The agency said it then upgraded the IDR to CCC+ reflecting the new capital structure and Fitch's assessment of parent-subsidiary linkage between Intralot and Intralot Inc., under its parent-subsidiary linkage criteria.
“The CCC+ IDR reflects Intralot's weak stand-alone credit profile (SCP) and weak legal ties with its U.S.-based subsidiary, Intralot Inc. The rating reflects its substantially smaller scale and Intralot's weaker market opportunities of its non-U.S. operations, as well as higher leverage metrics after deconsolidating Intralot Inc.'s profile (only adding back cash flows allowed to be up-streamed to Intralot under current documentation). However, we acknowledge the adequate debt service cover at parent level under the new capital structure,” Fitch said in a press release.
The agency also upgraded the senior unsecured rating assigned to the 2024 notes issued by Intralot Capital to CCC+/RR4 from C/RR4.
“A higher recovery percentage within the RR4 band (50% vs. 32% previously) reflects a higher waterfall generated recovery computation (WGRC), which takes additional EV recovered from the sale of US business into account in case of distress,” Fitch said.
The agency said it withdrew the 2021 notes’ rating due to the exchange upon the completion of the restructuring.
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