Moody’s upgrades Cirsa to B1 from B2 with positive outlook

Investing.com -- Moody’s Ratings has upgraded Cirsa Enterprises, S.A.’s corporate family rating to B1 from B2 following the company’s initial public offering (IPO), which began trading on Spanish Stock Exchanges on July 9.

The rating agency also upgraded Cirsa’s probability of default rating to B1-PD from B2-PD and raised the instrument ratings on several of the company’s senior secured notes to B1 from B2. The outlook on all ratings is positive.

"We have upgraded Cirsa’s ratings to B1 to reflect the expected leverage reduction post-IPO completion and the enhanced financial flexibility," said Lola Tyl, Moody’s lead analyst for Cirsa.

The IPO included a primary issuance of ordinary shares with gross proceeds of approximately €400 million. Cirsa plans to use the net proceeds of €375 million to repay existing debt, including the full amount of its outstanding €285 million backed senior secured floating notes due in 2028.

Following the IPO and debt repayment, Cirsa expects its net leverage to decrease to around 2.7x from 3.3x. Moody’s estimates this corresponds to an adjusted gross leverage of approximately 3.0x post-IPO, compared to 3.5x before the offering.

While Blackstone (NYSE:BX) will remain Cirsa’s majority owner after the IPO, the company will benefit from a more conservative financial policy, targeting a net leverage ratio between 2.0x and 2.5x. The company plans a 35% dividend payout ratio starting in 2026.

Cirsa has demonstrated strong operating performance, with revenue and company-adjusted EBITDA growth of 12% and 9% respectively in Q1 2025. Moody’s expects the company’s EBITDA to continue growing at mid to high single digits, supported by both land-based and online activities.

The B1 rating reflects Cirsa’s leading market positions in Spain and Latin America and its diversification across geographies and business segments. However, the rating is constrained by the company’s significant presence in emerging markets, which generate around 40% of EBITDA, limited online offering, exposure to foreign-exchange fluctuations, and regulatory risks in the gambling industry.

Cirsa’s liquidity is considered good, supported by €273 million in cash as of March 31 and a €275 million revolving credit facility maturing in December 2029, which is expected to be fully undrawn following the IPO.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.