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Bally's Corporation Restructures Debt After Receipt of New York Casino License Award
The Bally's Corporation has announced new financing for its land-based gaming projects in Chicago, Las Vegas, and New York.
The Bally's Corporation is nearly engaged in developing physical casinos in three of the largest markets in the United States simultaneously and has restructured its current debt to account for those expenses. Bally's shared the terms of an agreement with three private investment entities with shareholders on Dec. 8.
Bally's announces deals with investment firms
While Bally's presence among the best online casino apps in the US is limited, its prominence on the brick-and-mortar side of casino gaming in the US could reach its zenith soon. In addition to developing properties in Chicago and Las Vegas, Bally's has received a license to operate a casino in the downstate region of New York as well.
Through the combination of these projects, Bally's has committed to more than $7 billion in construction costs and licensing fees. According to InvestingPro data, the company was carrying nearly $5.7 billion in debt as of the most recent quarter.
To improve its ratio of capital to debt, Bally's has agreed to $600 million in an initial term loan and another $500 million in delayed draw term loans, per a Form 8-K filing. The three funds providing the loans are Ares Management Credit, King Street Capital Management, and TPG Credit.
While Bally's stated that the financing was meant to provide for "general corporate purposes," comments from officials in New York regarding its plan for a casino in the Bronx and recent fundraising by TPG Credit suggest that Bally's New York ambitions are a primary motivation for taking out the loans.
Concerns over Bally's liquidity loom over New York bid
The New York State Gaming Commission's Facility Location Board selected Bally's as one of three recommendations to the Commission for licensure, but it didn't do so without reservations. The Selection Document states that the Board members have concerns about Bally's "high leverage" and stressed that Bally's needs to "oversee its liquidity carefully."
However, the comments also highlighted that strong financing indications of interest from large banks and investors partially mitigate Bally's execution risk. Just over a week later and a day after Bally's filed the 8-K, TPG Credit announced more than $6.2 billion in capital commitments.
The new loans should help Bally's fulfill its New York commitments amid these concerns about Bally's financial commitments. That license could potentially help Bally's expand its iGaming product into New York, should the state ever allow residents to play on the BetMGM Casino app and other platforms.
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This new funding helps push Bally's to the forefront of land-based casinos in major US markets.
