Casino and media conglomerate Affinity Interactive is currently collaborating with investment bank Moelis & Co. as they navigate ongoing discussions with bondholders. This strategic move comes in response to increasing financial troubles and rising debt ratios that have become a cause for concern among creditors. With this partnership, Affinity Interactive aims to steady its business in the face of mounting debt pressures. Akin Gump Strauss Hauer & Feld LLP, a law firm noted for its expertise in corporate restructuring and Chapter 11 cases, has been retained by some bondholders, underscoring the severity of the financial predicament. These investors are reportedly anxious about Affinity’s financial prospects and the potential impact on their bond valuations.
Alongside Moelis, Affinity Interactive has enlisted Macquarie Group Ltd. to explore potential asset sales. The company is considering divesting assets that may include real estate holdings or digital gaming properties such as its betting and media business, Daily Racing Form. This decision follows previous unsuccessful attempts to sell certain properties. The intensifying financial woes are evident from the market performance of the company’s senior secured notes due in 2027, which are currently trading at less than half of their face value. Prominent credit rating agencies have also reacted; Moody’s downgraded Affinity’s rating to Caa1 in April, and S&P Global Ratings assigned a CCC+ rating, noting decreasing earnings and escalating costs. The firm’s debt-to-EBITDA ratio, which has inflated from 7.8 times in 2023 to a projected 11.7 times by late 2024, paints a concerning picture.
Affinity Interactive’s recent financial maneuvers, such as selling the Rail City Casino in Sparks, Nevada, have added to these concerns by reducing the company’s earnings base. This situation exemplifies the broader challenges faced by mid-size regional gambling operators in a fiercely competitive and capital-intensive market. Z Capital Group’s private equity arm, which owns
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