Bally’s Remains Bullish on Petersburg Casino Despite Credit Rating Setbacks

Bally’s Corporation just suffered another setback as Fitch Ratings, an American credit rating agency, lowered its outlook on the operator. Previously B+, the company’s rating has now been reduced to B because of the casino company’s precarious financial situation.

Fitch is not the only big credit rating agency to lower Bally’s either. Previously, Moody’s and S&P also lowered their grade for Bally’s. For reference, Moody’s reduced the operator’s rating to B2, while S&P downgraded its outlook for Bally’s to junk-bond status.

In spite of that, Bally’s told The Progress-Index that the rating changes would not impact the bid for a casino in Petersburg, Virginia. The casino company plans to challenge four competitors for the proposed casino as it remains confident in its ability to construct a world-class property in the Old Dominion.

Other bidders include the Cordish Companies, Penn Entertainment, Rivers Casino and the Warrenton Group.

Bally’s told The Progress-Index that its success in Virginia will ultimately depend on its selection by the city and the city’s voters’ approval via November’s referendum. In any case, a spokesperson confirmed that the company remains optimistic despite the setbacks.

For reference, Senate Bill 628 seeks to turn Petersburg into the fifth city in the state to host a casino. While Governor Youngkin is supportive of the measure, he still has some questions. The leader has until April 8 to sign, amend or veto the legislation.

Bally’s Needs to Fund Its Chicago Project

In the meantime, the Bally’s spokesperson said that it is too early to properly determine what the long-term effect of its lowered rating would be. The company is currently experiencing some financial struggles as it continues to seek another $800 million for its $1.1 billion casino in downtown Chicago.

At the same time, Bally’s is also considering the construction of a smaller casino in Pennsylvania, close to the Penn State University campus. However, the lower credit rating may make raising money for these projects more difficult experts believe.

In other news, K&F Growth Capital, an asset management firm and minority shareholder in Bally’s, recently expressed its concerns about Standard General’s recent proposal to acquire all outstanding shares in the casino company. In a letter to the Bally’s board, the shareholder expressed its concern about the bid and discussed some issues.