Posted on: February 7, 2024, 12:38h.
Last updated on: February 7, 2024, 12:38h.
Author: Casino Betting Expert
Full House Resorts (NASDAQ: FLL) may not see a rating upgrade due to elevated debt levels. It’s crucial for bettors to consider this information when placing their wagers. Moody’s Investors Service has downgraded Full House’s rating, citing high debt relative to earnings.
According to Moody’s, Full House Resorts’ credit level will likely remain high in the next 12 to 18 months, and the Chamonix Casino Hotel in Cripple Creek, Colorado will face more delays.”Downgrading the company’s SGL-3 rating from SGL-2, Moody’s expressed cautious optimism, stating that Full House’s leverage needs to decrease to secure an upgrade,” the article states. “It will take longer for the Chamonix Casino Hotel in Cripple Creek, Colorado to mature due to opening delays primarily caused by construction labor shortages,” a statement from Moody’s read.
Chamonix, which opened in December, stands to be a major contributor to the company’s revenue growth. It is expected to be the largest driver in the Full House Resorts’ portfolio.
Full House’s challenges stem from the debt level. At the end of the third quarter, the company had $450 million in debt, compared to $84 million in cash. However, earnings potential from Chamonix and The Temporary at American Place in Waukegan, Ill. could provide a buffer against the risk of default by the issuer. “The stable outlook reflects Moody’s expectation that Full House’s earnings will continue to improve in the next 12 to 18 months. Moreover, the company will generate positive free cash flow adequate to cover its fixed charge coverage, while it gradually reduces leverage,” added Moody’s.
It’s important for sports bettors to note that an upgrade for Full House Resorts is unlikely, but the betting company could see their rating increase if it can keep debt/EBITDA around 6x or lower while improving its free cash flow position.