Dave & Buster’s $1.5 Billion Debt Prompts Review of Capital Structure Options
Key Facts
Dave & Buster’s hired Moelis to help address $1.5 billion in debt, Bloomberg reported on October 28, citing people familiar with the matter. The move puts the capital structure under review, but does not mean the company has announced a refinancing or restructuring plan. Octus reported on October 22 that the company was working with Moelis to evaluate capital structure options, including a liability management exercise. Dave & Buster’s did not respond to Octus’s request for comment, while Moelis declined to comment. The company has not announced an outcome of the review or details of a specific path to address the debt.
The review of capital options coincides with action by creditors. Bloomberg reported that a group of the company’s creditors is working with PJT Partners and law firm Gibson Dunn, has signed a cooperation agreement and is seeking signatures to broaden support. This puts the company’s discussions with its adviser alongside parallel creditor coordination, as both sides consider options related to the liabilities. The report does not specify whether the group has reached a unified position on any debt treatment. The available information also does not include a final agreement or an announcement of a completed restructuring.
The company had $1,500.5 million in long-term net debt on August 4, 2026, compared with $1,515.0 million on February 3, according to its filing with the U.S. Securities and Exchange Commission. On the same date, the company reported $16.0 million in cash and cash equivalents, down from $16.6 million on February 3. The figures highlight the scale of the debt relative to the reported cash balance, while net debt remains slightly above $1.5 billion. The comparison between the two dates shows a limited decline in net debt alongside a decrease in available cash. These balances provide a financial snapshot as of August 4, before reports in October that the company had hired Moelis.
Results for the second quarter of fiscal 2026 show pressure on operating performance and profitability. Revenue was $544.1 million in the quarter ended August 4, down 2.4% from the corresponding period of fiscal 2025, while same-store sales fell 2.9% year over year. The company posted a net loss of $12.5 million, compared with net income of $11.4 million in the second quarter of fiscal 2025. Adjusted earnings before interest, taxes, depreciation and amortization also fell to $98.9 million from $129.8 million a year earlier. In contrast, adjusted free cash flow for the six months ended August 4 improved to positive $19.5 million, from negative $36.5 million in the six months ended August 5, 2025.
The company continued to expand during the same quarter, opening six new domestic locations in the second quarter of fiscal 2026, according to its filing. That came during a period when sales at existing stores, revenue and adjusted earnings declined from the corresponding period a year earlier. In September, Moody’s Ratings lowered its outlook on the company’s debt to negative from stable, while maintaining its B3 corporate rating. The agency cited weak interest coverage, high leverage and sluggish financial performance, Bloomberg reported. The credit assessment adds context to the review of capital options, without determining its outcome.
Credit concerns were reflected in trading of the company’s $691 million term loan due in 2029. Bloomberg reported that the loan traded at 55.875 cents on the dollar on Wednesday, October 28, compared with 93.75 cents on February 17. This comes as the company turns to Moelis for help addressing its debt and a group of creditors works with PJT Partners and Gibson Dunn to broaden support for the cooperation agreement. In equity markets, Moelis shares, trading under the ticker MC, closed at $55.88 on October 27, according to EL7 data; the available data do not include the stock’s trading range in that session. Moelis is scheduled to report third-quarter 2026 results and hold a conference call on November 5.