Full House downgraded as financing terms remain unresolved
Texas Capital Securities has downgraded Full House Resorts to Hold from Buy, citing uncertainty around debt refinancing and funding for its permanent American Place casino in Waukegan, Illinois. Analyst David Bain reduced his price target to $1 from $3.50. The November 2 assessment focused on unsettled financing terms and conditions in the high-yield credit market.
Bain said he believed Full House had likely arranged permanent financing for American Place, potentially through a real estate investment trust sale-and-leaseback transaction. That remains the analyst’s assessment. The report did not identify a confirmed property buyer, disclose agreed transaction terms, or establish that a financing agreement had closed.
The company’s own October 21 disclosure described several connected financing discussions. Full House said it had spent months negotiating with a major financial institution that had expressed willingness to fund all construction costs for the permanent casino. The development is intended to replace its existing temporary operation with a significantly larger facility.
Company outlines refinancing alongside casino construction
Full House also disclosed discussions with existing and prospective lenders and bondholders about replacing its 8.25% senior secured notes due in 2028. The contemplated financing included approximately $525.0 million of new senior secured notes due in 2031 and a new $100.0 million revolving credit facility. Those amounts describe proposed transactions rather than completed borrowings.
The company said proceeds from the financing arrangements would redeem its existing notes, repay its current credit facility, cover American Place construction, and fund associated fees, expenses, and general corporate purposes. It expressly qualified the discussions: “There can be no assurance that any such transactions can or will be consummated.” Completion remained subject to definitive documentation.
Bain’s report also addressed operating performance in Colorado, where Full House has been implementing cost reductions at Chamonix Casino Hotel in Cripple Creek. He said the changes could disrupt near-term operations but expected their fuller benefit to emerge in the fourth quarter and support margins in 2027. Those comments represent the analyst’s expectations, rather than reported future results.
For the third quarter, Bain forecast EBITDA of $14.1 million, below the $15.8 million consensus figure cited in the report. His decision to move to Hold rested on waiting for more clarity about the company’s capital structure. Full House’s October disclosure separately warned that construction financing and refinancing might not be completed on acceptable terms, or at all.
