Scientific Games International amends facility to allow business sale, issuance of additional debt

By Angela McDaniels

Tacoma, Wash., Feb. 19 - Scientific Games Corp. subsidiary Scientific Games International Inc. amended and restated its credit facility on Feb. 12, according to an 8-K filing with the Securities and Exchange Commission. Scientific Games is the guarantor for the facility.

The primary purpose of the restatement is to:

• Allow the company to sell its racing and venue management businesses to Sportech plc;

• Allow the company to enter into some cooperative transactions with Playtech Ltd. relating to internet services, central monitoring and control systems, gaming devices or terminals;

• Allow the company's non-guarantor subsidiaries to incur an additional $150 million of debt;

• Allow the sale of any or all of the capital stock of some of its non-guarantor subsidiaries; and

• Allow the sale of the capital stock of certain non-wholly owned subsidiaries, or non-subsidiaries in which Scientific Games owns an interest, as a result of the occurrence of certain compliance events.

The company would be required to use the net cash proceeds from any additional non-guarantor subsidiary debt or distributions to prepay debt.

The amendment also provides for an increase in the amount of the company's obligations related to its Italian concession, excludes from the definition of "collateral" any capital stock the company may own in any joint venture between it and a Playtech entity and allows the company to make some additional investments, including investments in some joint ventures under the Playtech transactions and investments in some of Scientific Game's businesses relating to lottery ticket validation network and ticket distribution services currently provided to the China Welfare Lottery in the People's Republic of China.

Some financial ratios were revised under the amendment. The company will now be required to maintain a consolidated leverage ratio of no more than 5.75 to 1 for the quarter ended Dec. 31 through the quarter ending March 31, 2012, no more than 5.5 to 1 for the quarter ending June 30, 2012 and 5.25 to 1 for the quarters after that.

Scientific Games will also have to maintain a consolidated senior debt ratio of no more than 2.75 to 1 for the quarter ended Dec. 31 through the quarter ending June 30, 2012 and no more than 2.5 after that time.

Interest is unchanged except that a level was added to the top of the pricing grid so that the interest rate will be Libor plus 350 basis points if the consolidated leverage ratio is 4.75 to 1 or more.

In connection with the amendment, Scientific Games International agreed to pay $2.7 million in fees to consenting lenders and JPMorgan Chase Bank, NA, the administrative agent.

Scientific Games is a New York supplier of technology-based products, systems and services to gaming markets.

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