Scientific Games reworks term loan B amendment to adjust pricing

By Sara Rosenberg

New York, Sept. 9 – Scientific Games Corp. modified the amendment request to its existing $2,289,000,000 senior secured term loan B due Oct. 18, 2020 so that pricing will match the new $1,735,000,000 seven-year incremental covenant-light term loan B-2 instead of being 25 bps lower than the final spread on the term loan B-2, according to a market source.

The new term loan B-2 is still talked at Libor plus 425 basis points to 450 bps with a 1% Libor floor and an original issue discount of 99.

Also, the soft call protection on the term loan B-2 and on the amended term loan B was extended to one year from six months, the source said.

The company’s $2,085,000,000 of incremental senior secured bank debt (BB-) also includes a $350 million revolver due Oct. 18, 2018.

In addition to changing term loan B pricing, the amendment to the existing term loan B as well as to the company’s existing $300 million senior secured revolver due Oct. 18, 2018 will allow for the obtainment of the new debt.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Fifth Third, HSBC Securities (USA) Inc. and PNC Capital Markets are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Bally Technologies Inc. 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.

Other funds for the transaction will come from $750 million of seven-year senior secured notes, $2.2 billion of eight-year senior unsecured notes, $500 million of 10-year senior unsecured notes and $118 million of cash on hand.

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.

Net secured leverage is expected at 3.7 times, and net total leverage is expected at 6.4 times.

Closing is anticipated by year-end, subject to receipt of Bally shareholder approval, 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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