Scientific Games readies credit facility lender meeting for Sept. 3

By Sara Rosenberg

New York, Aug. 26 – Scientific Games Corp. is scheduled to hold a loan lender meeting on Sept. 3, according to a market source.

Earlier this month, the company said that it would be getting $2,085,000,000 of incremental senior secured bank debt and $3.45 billion of notes for its acquisition of Bally Technologies Inc.

As committed, the bank debt consists of a $1,735,000,000 seven-year incremental term loan and a $350 million five-year incremental revolver.

Pricing on the term loan is expected at Libor plus 375 basis points with a 1% Libor floor, and pricing on the revolver is expected at Libor plus 300 bps.

The term loan has 101 soft call protection for six months.

In addition, the company plans to amend its existing $2,294,000,000 senior secured term loan and existing $300 million senior secured revolver to allow for the new debt; however, if an amendment is not completed, a commitment to refinance the existing debt has been obtained.

As for the bond offering, it is expected to be split between $750 million in senior secured notes, $2.2 billion in eight-year senior unsecured notes and $500 million in 10-year senior unsecured notes.

Backing the notes is a $3.45 billion one-year bridge loan commitment, consisting of a $750 million senior secured tranche priced at Libor plus 475 bps with a 1% Libor floor, a $2.2 billion unsecured eight-year tranche priced at Libor plus 625 bps with a 1% Libor floor, and a $500 million unsecured 10-year tranche priced at Libor plus 675 bps with a 1% Libor floor. The spread on all tranches will increase by 50 bps every three months until it hits a specified cap.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. are the lead banks on the financing, with Bank of America on the left of the bank debt and JPMorgan on the left of the bridge loans.

Total debt to combined company EBITDA plus expected synergies and other adjustments is 6.3 times.

Under the agreement, Bally is being purchased for $83.30 per share in cash, for a total transaction value of about $5.1 billion, including net debt of around $1.8 billion.

Closing is expected in early 2015, subject to receipt of Bally shareholder approval, antitrust and gaming regulatory approvals and other customary conditions.

Scientific Games is a New York-based developer of technology-based products and services and associated content for gaming and lottery markets. Bally Technologies is a Las Vegas-based provider of games, table game products, systems, mobile, and iGaming solutions to gaming operators.

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