Affinity Interactive Seeks Financial Guidance Amid Mounting Debt Pressures

Casino and media group Affinity Interactive is working with investment bank Moelis & Co. to handle ongoing talks with bondholders as the company looks at ways to manage its growing debt load. This move shows an attempt to steady the business as financial troubles and higher debt ratios worry creditors.

Affinity Bondholders Turn to Legal Experts as Debt Pressures Mount

People who know about the situation said some bondholders have hired Akin Gump Strauss Hauer & Feld LLP, a law firm known for its skill in helping companies restructure and deal with Chapter 11 cases. These investors seem worried about Affinity’s financial future and the chance of a debt deal that could make their existing bonds worth less, reported Bloomberg.

Besides working with Moelis, Affinity has also brought in Macquarie Group Ltd. to help find possible assets to sell. The company is thinking about selling off assets that might include real estate or digital gaming properties, like its betting and media business Daily Racing Form. These talks come after earlier efforts to sell certain properties did not work out.

Affinity’s financial troubles have grown worse over the last year. Market data shows the company’s senior secured notes due in 2027 now trade for less than half their face value. 

Credit Agencies Sound Alarm Over Affinity’s Rising Leverage and Shrinking Flexibility

Credit agencies have also noticed the financial strain on the company. Moody’s cut Affinity’s credit rating to Caa1 in April, while S&P Global Ratings dropped it to CCC+, pointing to lower earnings and higher costs. Analysts highlight a worrying rise in debt, with the company’s debt-to-EBITDA ratio going up from 7.8 times in 2023 to about 11.7 times by late 2024.

Z Capital Group‘s private equity arm owns Affinity, a company that runs various casinos in Nevada, Iowa, and Missouri. Among its properties are Silver Sevens Hotel & Casino in Las Vegas, Primm Valley Resort & Casino, and Buffalo Bill’s in Primm.

To get some cash, the company sold Rail City Casino in Sparks, Nevada. This sale decreased its earnings base. Experts in the field say Affinity’s move to look into selling assets or restructuring shows the wider issues mid-size regional companies face in a tough, money-hungry market.

The company’s debt is trading at low prices, and it does not have much room to refinance. What Affinity does next could decide if it goes for a planned restructuring or makes bigger changes to its operations to get back on solid financial ground.