Everi Payments Inc. Outlook Revised To Positive On Expectation For Continued EBITDA Growth, Ratings Affirmed

  • U.S.-based gaming and payments equipment and software provider Everi Payments Inc. continues to generate good EBITDA growth, which we believe it will maintain through 2020.
  • This level of EBITDA growth should allow the company to sustain adjusted leverage of less than 5x.
  • We are revising our outlook on Everi to positive from stable and affirming all of our ratings on the company, including the 'B' issuer credit rating.
  • The positive outlook reflects our forecast for continued EBITDA growth through 2020, which will reduce the company's adjusted leverage to the mid-4x area by the end of 2020.
NEW YORK (S&P Global Ratings) March 15, 2019—S&P Global Ratings today took the 
rating actions above. The outlook revision reflects Everi's EBITDA growth, 
which has outperformed the assumptions in our previous base-case forecast. We 
expect that this strong growth will allow the company to reduce its adjusted 
leverage under our 5x upgrade threshold this year, which compares with our 
previous expectation of the low-5x area.


The positive outlook on Everi reflects our forecast for continued EBITDA 
growth through 2020, which will reduce the company's adjusted leverage to the 
mid-4x area by the end of 2020.

We could raise our rating on Everi by one notch when its adjusted leverage 
improves to the mid-4x area. We believe this level of adjusted leverage would 
provide it with a sufficient cushion relative to our 5x upgrade threshold to 
absorb potential modest EBITDA volatility arising from economic weakness or 
modest acquisition spending.

We could revise our outlook on Everi to stable if we no longer believe that it 
will sustain adjusted leverage of less than 5x. Although less likely than an 
outlook revision, we would consider lowering our ratings on the company if we 
believe its adjusted leverage will increase above 7x, its interest coverage 
will fall below 2x, or if its liquidity position became impaired. This could 
occur because of an approximately 30% decline in Everi's EBITDA relative to 
our 2019 forecast, which would likely be driven by a sharp weakening in the 
economy that leads casino operators to meaningfully cut back on their gaming 
machine orders. This could also occur if an economic downturn significantly 
reduces player spending at casinos or if Everi undertakes a leveraging 
transaction.