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Flutter Prices $2.2 Billion in Debt

Flutter Entertainment (NYSE: FLUT) has priced over $2.2 billion in debt, to be issued in three tranches in dollars, euros, and British pounds. All senior secured notes are due to mature in 2031. 

The parent company of FanDuel is issuing $1 billion in 5.875% senior secured notes, €550 million ($621.5 million) in 4% bonds, and £450 million (almost $604 million) of 6.125% debt. Flutter also mentioned it has set the price for a $500 million dollar-denominated term loan B facility. Funds from the credit line and debt sales will partially go towards repaying loans taken for acquiring the Italian gaming firm Snaitech, which runs over 49,000 gaming and lottery machines in Italy. 

The transaction, finalized on April 30, raises Flutter’s online gaming market share in Italy to around 30% when integrated with the operator’s current Italian activities. Italy stands as the biggest gaming market in continental Europe, yet there is significant potential for online expansion in the region. 

“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 yo Flutter. “Greater digital adoption is expected to drive online market growth at a compound rate of approximately 10% over the next three years.”

Flutter's bond sales hold an IG rating. 

Flutter’s overall credit rating at Fitch Ratings stands at “BBB-,” just above junk status, but the research firm rated the new bond offering as “BBB,” pointing to growth driven by the purchases of Snaitech and NSX, which enhances the company’s presence 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 company also commended Flutter for the $5 billion repurchase initiative it revealed last September — the operator’s first capital return to shareholders in five years. Flutter plans to buy back $2 billion of its own shares this year. Fitch predicted a significant rise in Flutter’s 2025 earnings before interest, taxes, depreciation, amortization, and restructuring or rental expenses (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 Strategically Situated Compared to Competitors 

FanDuel is the biggest online sports betting operator in the US and is among the top players in the nation’s internet casino sector. Merging FanDuel with Flutter’s global presence, some analysts consider it a more attractive investment narrative compared to competitors. 

For instance, Entain, which holds a 50% stake in BetMGM, is under regulatory examination, whereas DraftKings (NASDAQ: DKNG) does not have the global reach that Flutter has. 

“(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.