Moody’s upgrades Intralot to B2 with stable outlook after Bally’s deal

Investing.com -- Moody’s Ratings has upgraded Intralot S.A.’s corporate family rating to B2 from Caa1 and its probability of default rating to B2-PD from Caa1-PD, with a stable outlook.

The rating agency also upgraded the instrument ratings of the €600 million backed senior secured notes due 2031 and the €300 million backed floating senior secured notes due 2031 to B2 from B3. Both notes were issued by Intralot Capital Luxembourg S.A., an indirect subsidiary of Intralot.

This action concludes the review for upgrade that began on July 7, 2025, and follows Intralot’s October 10 announcement that it completed its acquisition of Bally’s International Interactive business for an enterprise value of €2.7 billion. The deal was funded through €1.530 billion in cash and €1.136 billion in shares, making Bally’s the majority shareholder of Intralot.

On October 8, Intralot successfully executed a share capital increase, raising gross proceeds of approximately €429 million. The company also announced the full repayment of its €90 million syndicated bond loan due January 2026 and $184 million US term loan due July 2026.

Moody’s cited Intralot’s improved business profile and strengthened liquidity as key factors in the upgrade. The acquisition significantly increases the company’s scale and adds BII’s established position in the UK online gaming market.

The combined entity benefits from broader product and service diversification across both business-to-consumer and business-to-business segments. Moody’s expects the acquisition to improve margins and free cash flow generation, enhancing the company’s ability to reduce debt.

However, the rating agency noted some geographical concentration risk, with the UK accounting for approximately 60% of the group’s pro forma revenue. The merger also introduces integration challenges, and Intralot remains exposed to contract renewal risk and regulatory concerns typical in the gaming industry.

Following the acquisition, Moody’s expects Intralot’s adjusted gross leverage to be around 4.3x on a pro forma basis for 2025. The agency forecasts solid revenue growth from 2026 onward, supporting a gradual reduction in leverage to below 4.0x.

Intralot’s management has indicated plans to adopt a conservative financial policy, targeting a mid-term steady-state net leverage ratio of approximately 2.5x, though Moody’s estimates the company will achieve a pro forma company-adjusted net leverage ratio between 3.0x and 3.5x for 2025.

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