Fitch cuts Ontario Gaming loans, notes

Fitch Ratings said it lowered the ratings on Ontario Gaming GTA LP senior secured loans and notes to BB/RR2 from BB+/RR1 and revised the outlook to negative from positive. The agency affirmed OTG’s B+ issuer default rating.

OTG plans to add debt to fund a distribution to shareholders.

“Fitch projects the C$600 million dividend recapitalization, funded via an increase to the existing term loan B, to add about a turn and a half to OTG's leverage. Fitch estimates EBITDAR leverage of 6.2x at FYE24 (March 31), temporarily outside its negative sensitivity. Fitch focuses on gross metrics, adjusted for OTG's lease payments,” the agency said in a press release.

The negative outlook reflects a forecast for elevated leverage over the near to medium term. “The Outlook also reflects slower than anticipated opening of developments, which has pushed out the ramp up of the Toronto and Pickering casinos slightly, affecting margins, and negative FCF,” Fitch said.

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