Northern Ontario casino operator in a big hole

Gateway Casinos, operators of casinos in North Bay, Sault Ste. Marie, Sudbury and Thunder Bay, is reportedly looking to secure US$1.8 billion in private credit. 

Citing anonymous sources, Bloomberg is reporting that one of Canada’s largest gaming companies is working with Morgan Stanley to reach out to interested lenders to help refinance its loans and pay its owners a dividend.

Gateway is majority owned by Catalyst Capital Group, a private equity firm, since 2009. It runs 31 gaming venues in Ontario, Alberta and B.C.

Bloomberg said these private discussions are at the preliminary stage and that the details and scope of a potential deal could change. The Bloomberg article did not dispense any further information on the extent of Gateway’s debt situation. 

Bloomberg was unable to obtain comment from Catalyst nor Morgan Stanley. 

In October last year, Bloomberg reported that Catalyst was considered a sale among other strategic options.

An article in Casino.org said a rating by Moody’s Investor Service performed in November 2022 upgraded the casino operator to “B3” from “Caa1.”

“The ‘B3’ grade is six notches into junk territory at Moody’s,” the article said.

A gaming rival, Great Canadian Entertainment, owned by Apollo Global Management, is also out to obtain a $665-million loan in the U.S. to pay down its debt with higher interest rates. Great Canadian has 25 locations in Ontario, B.C., New Brunswick and Nova Scotia.