S&P rates Flutter loan BBB-

S&P said it assigned Flutter Entertainment plc’s planned up to €1 billion equivalent term loan BBB- issue and 2 recovery ratings (70%-90%; rounded estimate: 70%), which is in line with its currently rated debt. Additionally, the agency revised its outlook for the company to stable from positive and affirmed the BB+ issuer rating.

“The outlook revision follows an expected temporary spike in Flutter's adjusted leverage metrics, principally on account of the completion of its debt-funded acquisition of Sisal, as well as ongoing expansion activity in the U.S. On Aug. 4, 2022, Flutter completed the acquisition of Italian online gaming and lottery operator Sisal using a €2 billion debt facility secured at the time of the original deal announcement on Dec. 23, 2021. We expect this acquisition, together with ongoing heavy investment activity in the U.S., to result in adjusted debt to EBITDA reaching more than 5x by year-end 2022,” the agency said in a press release.

However, S&P said it considers the leverage hike to be temporary and sees a reduction of debt to EBITDA to less than 4x by 2023.

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