S&P downgrades GTECH

Standard & Poor’s said it lowered the corporate credit rating on GTECH SpA to BBB- from BBB and placed the rating on CreditWatch with negative implications.

S&P also said it lowered the ratings by one notch and placed them on CreditWatch with negative implications.

The downgrade and CreditWatch listing follows news that GTECH intends to purchase IGT for $4.7 billion, about $3.7 billion of which will be funded in cash and the remainder in shares.

Closing of the acquisition is subject to shareholder approval at both GTECH and IGT, as well as regulatory approvals, S&P said.

GTECH expects the acquisition to close in the first half of 2015, the agency said.

The CreditWatch listing also reflects an expectation that GTECH’s pro forma leverage will likely increase to the low- to mid-4x range and could remain at more than 4x at the end of 2015, which would be somewhat weak for a BBB- rating on the combined company, S&P said.

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