Spanish Gaming Company Cirsa Launches Bond Sale to Raise $700M

Posted on: July 5, 2023, 08:01h. 

Last updated on: July 5, 2023, 12:31h.

Erik Gibbs Read More

Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Cirsa, the Spain-based gaming giant owned by Blackstone, has announced the launch of a bond issue worth €650 million (US$707 million). The exercise begins Wednesday, with the company looking to use the funds to pay down its outstanding debt.

Cirsa explained that if the issuance is successful, the capital will be used to redeem the entire outstanding capital of senior guaranteed bonds that carry an interest rate of 6.25%. These come due this year after their launch in 2018.

The proceeds will also serve to pay the outstanding capital of floating rate notes due in 2025. A percentage of the funds will go toward accrued expenses and unpaid interest on both vehicles.

Cirsa Continues Upswing

The banks leading the placement – Barclays, BBVA, Credit Suisse, Deutsche Bank, Jefferies, and UBS – will hold meetings Wednesday and Thursday with investors, according to the company’s announcement. They will present the operation, test the interest among investors, and set the price of the securities. The maturity date is already established, with the bonds expiring in 2028.

The new bond placement follows a similar exercise from last year. In October, Cirsa placed €425 million (US$462 million) in the bond market.

The company initially expected to issue €350 million (US$380.5 million) in bonds, but found more investors than it had anticipated. The buyers were more than 75 international investment funds, and the maturity was postponed until 2027.

Cirsa closed 2022 with an operating profit of €552.5 million (US$600.7 million) after a return to normality in most of its markets following the COVID-19 pandemic. Operating income was €1.74 billion (US$1.9 billion) and it closed the purchase of the Italian online gaming company E-Play24.

iGaming delivered an increase of 80%, registering €233 million (US$253.34 million). This became the third-highest source of income, consistent with increases seen in most of the global iGaming market.

That success continued in 2023. In the first quarter of the year, Cirsa registered an operating income of €482.5 million (US$524.6 million), 29.2% more than from January to March 2022. Its net profit was €18.5 million (US$20.11 million), almost triple the amount from a year earlier.

Global Expansion Continues

In the field of inorganic growth, the company has started the year with three international growth operations, with the incorporation of a casino in Tuxtla, Mexico, for €10.5 million (US$11.4 million) and the purchase of two Italian companies, an online sportsbook, and a land-based gaming operator.

These are added to its 2022 acquisitions, such as the casino in Tangier, Morocco, and most of the Italian online gaming company E-Play24. Cirsa also picked up Mexico’s Ganabet, the fifth-largest online sportsbook in the country.

It also incorporated the Italian startup Go Goal, dedicated to the sports betting sector. Through its Sportium sportsbook, it signed a deal with Manchester City to be the soccer club’s sponsor in Latin America.

Those IPO plans had to be put on hold because of turbulence in the global banking space. Most notably, the collapse of Silicon Valley Bank and Credit Suisse left investors and financiers skittish. However, it’s likely a Cirsa public offering will come before the end of the year.