Bally’s Corp. (formerly Twin River Worldwide Holdings, Inc.) — Form 8-K Summary
Reporting date: April 24, 2020. The filing reports an amendment to the company’s bank credit facility in response to the COVID-19 pandemic. The filing was signed on April 27, 2020.
Material Credit Facility Amendments
- The company received temporary relief from its maximum total net leverage ratio covenant.
- Until delivery of compliance materials for the quarter ending March 31, 2021, or earlier termination by the company, the leverage covenant is replaced by a monthly minimum unrestricted-liquidity test.
- Required unrestricted cash at month-end is:
- $75.0 million at April 30 and May 31, 2020;
- $65.0 million at June 30, 2020;
- $55.0 million at July 31, 2020; and
- $50.0 million at each month-end thereafter through March 31, 2021.
- Interest rates on credit facility borrowings increased by 0.5% during the covenant-relief period.
- During the relief period, the company may not declare or pay common-stock dividends, make other restricted payments, or complete investments or acquisitions, except for previously announced transactions.
Post-Relief Leverage Requirements
After the relief period, the maximum leverage ratio, generally defined as net debt divided by trailing 12-month EBITDA, will be:
| Trailing period ending | Maximum leverage ratio |
|---|---|
| March 31, 2021 | 6.25:1 |
| June 30, 2021 | 6.00:1 |
| September 30, 2021 | 5.75:1 |
| December 31, 2021 | 5.50:1 |
| Each subsequent fiscal period | 5.00:1 |
Financial Performance and Liquidity
The filing does not provide revenue, profit, cash-flow, margin, debt-balance, or operating-performance figures. It establishes specified minimum unrestricted-cash requirements and increases borrowing costs by 0.5% during the relief period, but does not state the company’s actual liquidity or debt balances.
Outlook, Risks, and Unusual Items
- The amendment indicates heightened liquidity and covenant risk arising from the COVID-19 pandemic.
- Failure to maintain the required monthly liquidity could result in a breach of the amended credit agreement.
- Dividend, restricted-payment, investment, and acquisition limitations may constrain capital allocation and strategic activity.
- The company will face progressively tighter leverage limits after the relief period.
- The complete terms and conditions are contained in Amendment No. 1 to the Credit Agreement, filed as Exhibit 10.1.
Key Facts for Investors to Verify
- Actual unrestricted cash maintained at each required month-end.
- Whether the company remained in compliance with the amended credit agreement.
- The amount and effective cost of outstanding credit-facility borrowings after the 0.5% interest-rate increase.
- The timing and terms of any early termination of the covenant-relief period.
- Subsequent leverage ratios, EBITDA performance, refinancing needs, and any amendments or waivers to the credit facility.