S&P puts Scientific Games on positive watch

S&P said it placed all its Scientific Games Corp. on CreditWatch with positive implications.

The placement follows the company reporting an agreement to sell its sports betting business for $1.2 billion, $1 billion of which will be cash proceeds. Scientific Games had already announced its plans to sell its lottery business.

“We believe asset sale and divestiture proceeds may drive significant deleveraging, even in a scenario of investment spending. We anticipate adjusted leverage may materially improve, possibly to under 6x in 2022, from our forecast for the low- to mid-7x area in 2021 (excluding any divestitures), since we expect the majority of asset sale proceeds from Sci Games' sports betting business, and possible additional divestiture proceeds from its lottery business, will be used for debt reduction. This level of leverage improvement may support a one-notch higher rating for Sci Games, in our view,” S&P said in a press release.

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