{"id":3446,"date":"2025-04-01T13:59:12","date_gmt":"2025-04-01T13:59:12","guid":{"rendered":"https:\/\/www.casinousa.com\/news\/?p=3446"},"modified":"2025-04-01T13:59:12","modified_gmt":"2025-04-01T13:59:12","slug":"fitch-lowers-ballys-credit-rating-amid-chicago-casino-risk","status":"publish","type":"post","link":"https:\/\/www.casinousa.com\/news\/fitch-lowers-ballys-credit-rating-amid-chicago-casino-risk","title":{"rendered":"Fitch Lowers Bally\u2019s Credit Rating Amid Chicago Casino Risk"},"content":{"rendered":"<p><img decoding=\"async\" src=\"https:\/\/www.casinousa.com\/news\/wp-content\/uploads\/sites\/2\/2021\/11\/ballys-corporation.jpg\" alt=\"Bally&#039;s Corporation\" class=\"alignright size-full wp-image-2319\" width=\"300\" title=\"Fitch Lowers Bally\u2019s Credit Rating Amid Chicago Casino Risk\"\/><strong>Summary:<\/strong><\/p>\n<ul>\n<li>Fitch Ratings has lowered Bally\u2019s credit score from \u201cB\u201d to \u201cB-.\u201d <\/li>\n<li>The call comes amid concerns regarding its Chicago casino plans.<\/li>\n<li>Despite its cash reserves and important funding from GLPI, Bally\u2019s is looking at important long-term obligations. <\/li>\n<\/ul>\n<p>NYSE-listed <strong>Bally\u2019s Corporation<\/strong> has recently faced an important <strong>credit rating decrease from \u201c<em>B<\/em>\u201d to \u201c<em>B-<\/em>\u201d<\/strong>. <\/p>\n<p><strong>Fitch Ratings<\/strong>, the rating agency that \u201c<em>provides forward-looking credit opinions<\/em>\u201d, has made the adjustment.<\/p>\n<p>The decision now places the global casino-entertainment company \u201c<em>with a growing omni-channel presence<\/em>\u201d just one step above the category where issuers are considered to carry \u201c<em>substantial risk<\/em>\u201d. <\/p>\n<p>A major factor behind this downgrade is the uncertainty surrounding <a href=\"https:\/\/www.casinousa.com\/news\/ballys-chicago-to-move-forward-after-multi-project-labor-agreement-signed\">Bally\u2019s ambitious $1.7 billion Chicago casino<\/a> and hotel project.<\/p>\n<p>Fitch opted for the \u201c<em>negative<\/em>\u201d outlook after expressing concerns over the execution of Bally\u2019s largest and most expensive project to date. <\/p>\n<p>The <strong>planned integrated resort, set to open in late 2026<\/strong>, will be Chicago\u2019s only casino within city limits. However, the company still faces a lot of competition from existing casinos in the surrounding areas.<\/p>\n<p>In <a href=\"https:\/\/www.fitchratings.com\/research\/corporate-finance\/bally-corporation-17-04-2024\">Fitch&#8217;s statment<\/a>,<\/p>\n<blockquote><p>There is execution risk in the development of the Chicago projects, as well as other potential development opportunities. Challenges include a saturated Chicago gaming market, the higher-than-average gaming tax rate, and the typical ramp-up of a new casino development<\/p><\/blockquote>\n<p>While owning the only casino in the third-largest city in the U.S. should give Bally\u2019s a strategic advantage, <a href=\"https:\/\/www.casinousa.com\/states\/illinois\">Illinois<\/a> is already a competitive market that counts 16 brick-and-mortar casinos, many next to Chicago.<\/p>\n<h2 id=\"the-lease-payments-problem\">The Lease Payments Problem <\/h2>\n<p>The road to securing Chicago\u2019s sole casino license was anything but fast and smooth. <\/p>\n<p>On the contrary, when <strong>Mayor Lori Lightfoot<\/strong> eventually decided to pick Bally\u2019s three years ago, the call stirred up talks concerning the company\u2019s ability to support the project. <\/p>\n<p>As expected, <strong>Bally\u2019s low credit rating added even more fuel to the fire<\/strong> and opened talks regarding its financial stability.Looking to regroup, the company decided to seal a few deals with Gaming and Leisure Properties Inc.<strong> (GLPI). <\/p>\n<p>This <strong>attracted $2.07 billion in total capital<\/strong>, of which $800 million was aimed at covering any shortfalls in the Chicago project. While this financial boost alleviated some immediate concerns, it also introduced long-term financial obligations. <\/p>\n<p>Namely, Bally\u2019s will need to pay rent to GLPI for multiple properties, including the Chicago establishment. Fitch highlighted the risk associated with these lease payments, which they <strong>estimated to reach close to $100 million on a yearly basis<\/strong>. <\/p>\n<h2 id=\"ballys-has-cash-reserves-and-no-big-debts\">Bally\u2019s Has Cash Reserves and No Big Debts<\/h2>\n<p>Despite these challenging times ahead, the company has financial resources at its disposal, with <strong>$171 million in reported cash reserves at the end of last year<\/strong> and an additional $620 million through an undrawn revolving credit facility. <\/p>\n<p>Moreover, <strong>Bally\u2019s does not face any major debt maturities until 2028<\/strong> and can generate more capital by selling the real estate of Twin River Casino in Rhode Island to GLPI for $735 million. <\/p>\n<p>The transaction would require Bally\u2019s to pay an annual rent of approximately $58.8 million with built-in escalators. <\/p>\n<p>The proceeds could ease some of the financial strain from the Chicago project. Nonetheless, Fitch is still cautious regarding the company\u2019s overall debt situation.<\/p>\n","protected":false},"excerpt":{"rendered":"Summary: Fitch Ratings has lowered Bally\u2019s credit score from \u201cB\u201d to \u201cB-.\u201d The call comes amid concerns regarding its Chicago casino plans. Despite its cash reserves and important funding from GLPI, Bally\u2019s is looking at important long-term obligations. NYSE-listed Bally\u2019s Corporation has recently faced an important credit rating decrease from \u201cB\u201d to \u201cB-\u201d. Fitch Ratings, [&hellip;]","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1,6,5],"tags":[],"class_list":["post-3446","post","type-post","status-publish","format-standard","hentry","category-news","category-financial","category-industry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fitch Lowers Bally\u2019s Credit Rating Amid Chicago Casino Risk<\/title>\n<meta name=\"description\" content=\"Fitch Ratings has dropped Bally\u2019s Corporation\u2019s credit rating to \u201cB-\u201d because of the associated risks tied to its casino project in Chicago.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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