S&P assigns Scientific Games loan BBB-

Standard & Poor's said it assigned a BBB- rating to Scientific Games International's new $803 million senior secured credit facilities with a recovery rating of 1, indicating 90% to 100% expected recovery in a default.

The senior secured credit facilities comprise a $247 million revolving credit facility and a $555.8 million term loan both due June 30, 2015.

The transaction does not change the BB corporate credit rating and negative outlook on the parent company, Scientific Games Corp.

The ratings reflect the company's financial risk profile as aggressive, given the company's high debt leverage and substantial acquisition activity and investments through joint ventures, S&P said.

The rating also reflects the company's fair business risk profile, reflecting the highly competitive market conditions in the lottery industry for contract renewals and for new contracts, which often result in pricing pressure, the agency said.

Offsetting factors are its leadership position in the instant ticket lottery segment of the gaming industry, a diversified customer base and substantial recurring revenue and cash flow, given long-term contracts with renewal options that are typically exercised, S&P said.

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