What Happened?
Shares of gaming, betting and entertainment company Bally's Corporation (NYSE: BALY) jumped 5.6% in the afternoon session after the company announced it secured approval from lenders for the sale and leaseback of its Twin River Lincoln Casino Resort.
The deal with Gaming and Leisure Properties (GLPI) was expected to generate $735 million in cash, a significant sum the company planned to use to strengthen its financial position. Bally's stated that upon the transaction's closing, it would slash its secured debt by $500 million. This move directly addressed investor concerns about the company's unfavorable liquidity position. In addition to the debt reduction, the agreement allowed Bally's to extend a $460 million revolving credit facility by two years to 2028, giving it more financial flexibility. The news provided a clear signal that management was taking decisive steps to fortify the company's balance sheet.
The shares closed the day at $10.49, up 5% from previous close.
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What Is The Market Telling Us
Bally’s shares are extremely volatile and have had 53 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 0.9% on the news that the company announced amendments to its credit facility and secured lender consent for the sale and leaseback of its Twin River Lincoln Casino Resort.
The casino operator secured an extension on $460 million of its revolving credit facility commitments, pushing the maturity date from 2026 to October 2028. Additionally, Bally's received unanimous consent from its revolving credit lenders for the proposed sale and leaseback of its Twin River Lincoln property to Gaming and Leisure Properties Inc. for $735 million in cash. The transaction is aimed at significantly reducing the company's debt load. Upon the deal's completion, Bally's plans to use the proceeds to reduce its secured debt and credit facilities by $500 million, a move that improves its financial flexibility and strengthens its balance sheet.
Bally's is down 46% since the beginning of the year, and at $10.50 per share, it is trading 52.4% below its 52-week high of $22.07 from November 2024.
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