Amaya Gaming sets tranche sizes, updates first- and second-lien pricing

By Sara Rosenberg

New York, July 28 – Amaya Gaming Group Inc. firmed its U.S. seven-year first-lien covenant-light term loan (B1/BB) size at $1.75 billion and its euro seven-year first-lien covenant-light term loan (B1/BB) size at €200 million, according to a market source.

At launch, the first-lien term loan was all U.S. dollars and sized at $2 billion. Last week, it was announced that a minimum €250 million tranche would be carved out of the U.S. tranche.

Also, pricing on the U.S. first-lien term loan firmed at Libor plus 400 basis points, the wide end of the Libor plus 375 bps to 400 bps talk, and pricing on the euro term loan was increased to Euribor plus 425 bps from talk of Euribor plus 375 bps to 400 bps, the source said.

In addition, the original issue discount on all of the first-lien term loan debt widened to 99 from talk in the 99˝ area.

The first-lien term loans still have a 1% floor and 101 soft call protection for six months.

As for the $800 million eight-year second-lien covenant-light term loan (Caa1/B), pricing was reduced to Libor plus 700 bps from talk of Libor plus 725 bps to 750 bps, the source continued.

The second-lien term loan still has a 1% Libor floor, a discount of 99 and call protection of 102 in year one and 101 in year two.

Another change made to the deal was the removal of the MFN sunset provision.

The company’s roughly $2.9 billion senior secured credit facility also includes a $100 million five-year revolver (B1/BB).

Recommitments were due by the close of business on Monday.

Credit agreement comments are due at noon ET on Tuesday and pricing is expected shortly thereafter, the source added.

Deutsche Bank Securities Inc., Barclays and Macquarie Capital (USA) Inc. are the bookrunners on the deal, with Deutsche Bank the left lead on the first-lien loan and Barclays the left lead on the second-lien loan.

The borrowers are Amaya BV and Amaya (US) Co-Borrower LLC.

Proceeds will be used to help fund the acquisition of Oldford Group Ltd., parent company of Rational Group Ltd., for $4.9 billion, including certain deferred payments, subject to other customary adjustments.

Other funds for the transaction will come from $1 billion to be raised through the issuance of convertible preferred shares on a private-placement basis at an initial conversion price of C$24 per convertible preferred share, $642 million from an equity issuance and $238 million in cash on hand.

For calendar year 2013, pro forma combined revenue was $1.3 billion, EBITDA was $474.8 million, and adjusted EBITDA was $473.8 million.

Closing is expected on or about Sept. 30, subject to approval by Amaya’s shareholders and customary conditions, including receipt of all regulatory approvals.

The combined company’s significant cash flow is expected to allow for rapid debt repayment and provide sufficient liquidity and flexibility to support ongoing growth prospects.

Amaya is a Pointe-Claire, Quebec-based provider of gaming products and services. Oldford Group is an Onchan, Isle of Man-based operator of gaming and related businesses and brands.

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