Cirsa upgraded to ’BB-’ by S&P after IPO and debt repayment

Investing.com -- Spanish gaming company Cirsa Enterprises S.A. received a credit rating upgrade to ’BB-’ from S&P Global Ratings on Thursday, following its successful IPO and debt reduction efforts.

The rating agency cited Cirsa’s improved leverage metrics, which are expected to decrease to 3.8x in 2025 from 4.5x in 2024, driven by the company’s recent debt repayment and projected EBITDA growth.

Cirsa completed its IPO on the Spanish Stock Exchange on July 9, raising approximately €460 million in primary and secondary proceeds. The company now has a market capitalization of about €2.38 billion, with private equity firm Blackstone (NYSE:BX) maintaining an 80% ownership stake and a 20% free float.

Following the public offering, Cirsa repaid €285 million of senior secured floating rate notes due 2028 on July 21. This debt reduction, combined with anticipated EBITDA growth, is expected to further improve the company’s leverage ratio to 3.5x by 2026.

S&P revised its assessment of Cirsa’s financial policy to FS-5 from FS-6, noting the company’s stated net leverage target of 2.0x-2.5x and its commitment to a minimum dividend payout ratio of about 35% of net income. The rating agency expects Blackstone to gradually exit its position through subsequent public offerings after the 180-day lock-up period expires.

The company reported strong first-quarter 2025 results with revenue up 11.5% year over year, primarily driven by expansion in its online segment through the integration of Apuesta Total (EPA:TTEF) (Peru) and Casino (EPA:CASP) Portugal. S&P projects Cirsa’s revenue will reach approximately €2.75 billion in 2025, up from €2.56 billion in 2024.

Despite these positive developments, S&P highlighted regulatory uncertainty as an ongoing constraint on the ratings. The stable outlook reflects expectations that Cirsa will continue expanding organically across different segments while maintaining disciplined M&A activity and keeping adjusted leverage comfortably below 4.0x.

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