Flutter Prices $2.2 Billion in Debt

• FanDuel parent will use proceeds to repay funds used for the acquisition of Snaitech, among other purposes
• Issue denominated in dollars, euros, and pounds
• Rated ‘BBB’ by Fitch

Flutter Entertainment (NYSE: FLUT) priced more than $2.2 billion in debt, which will be sold in three tranches denominated in dollars, euros, and British pounds. All of the senior secured notes mature in 2031.

The FanDuel parent is selling $1 billion worth of 5.875% senior secured notes, €550 million ($621.5 million) in 4% bonds, and £450 million (nearly $604 million) of 6.125% debt. Flutter also said it priced a $500 million dollar-denominated term loan B facility. Proceeds from that credit facility and the debt sales will be used in part to repay borrowings used for the acquisition of Italian gaming operator Snaitech, which operates more than 49,000 gaming and lottery devices in that country.

“Online penetration remains low, at 21% of market GGR in 2023, compared to more mature markets like the UK and Australia where rates exceed 60%,” according to Flutter. “Greater digital adoption is expected to drive online market growth at a compound rate of approximately 10% over the next three years.”

Flutter Bond Sales Carries IG Rating

Flutter’s broader credit rating at Fitch Ratings is “BBB-“, or one notch above junk territory, but research firm graded the new bond sale “BBB,” citing growth fueled by the acquisitions of Snaitech and NSX, which bolsters the buyer’s footprint in Brazil.

We anticipate revenue to rise by a 12% compound annual growth rate (CAGR) to 2027, fuelled by the additions of Snaitech and NSX in 2025 and acceleration of organic growth as the company reduces concentration on mature markets (such as the UK and the EU) and segments, including retail,” notes Fitch. “Strong growth will continue to be supported by US business expansion, but we assume that it will gradually slow to mid-single digit growth from double digits.”

The research firm also praised Flutter for the $5 billion buyback plan it announced last September — the operator’s first return of capital to shareholder in five years. Flutter is aiming to repurchase $2 billion worth of its shares this year. Fitch also forecast a noticeable increase in Flutter’s 2025 earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR).

“We forecast Flutter’s EBITDAR margin will grow to 20% in 2027 from 16.5% in 2024, due to material improvements in profitability at US business as it reaches sufficient scale,” adds the ratings agency.

Flutter Well-Positioned Relative to Peers

FanDuel is the largest online sportsbook operator in the US and one of the leaders in this country’s internet casino market. Combine FanDuel with Flutter’s international exposure and some analysts view it as a more compelling investment story than rivals.

For example, Entain, which owns half of BetMGM, is facing regulatory scrutiny, while DraftKings (NASDAQ: DKNG) lacks the international depth possessed by Flutter.

“(Flutter) is larger than Entain plc (BB/Stable) and DraftKings Inc. (BB+/Stable) in absolute EBITDAR and has a stronger presence in the US as well as greater product diversification than both peers, with higher exposure to lottery and other forms of gaming,” concludes Fitch.