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S&P: Scientific Games loan B+
S&P said it affirmed the B corporate credit rating on Scientific Games Corp.
The agency also said it assigned a B+ rating and 2 recovery rating to the company's proposed $3.4 billion term loan B-3 due 2021.
The 2 recovery rating indicates 70% to 90% expected default recovery.
The outlook is stable.
The agency also said it affirmed the B+ rating on the company's revolving credit facility, which the company is seeking to amend to lower the commitment to $534 million from $593 million and to extend the maturity to 2020 from 2018.
The recovery rating remains at 2, indicating 70% to 90% expected default recovery.
S&P also affirmed the B+ rating on the company's $1.95 billion 7% senior secured notes due 2022. The recovery rating remains at 2, indicating 70% to 90% expected default recovery.
The agency also affirmed the B- rating on the company's $2.2 billion senior unsecured notes due 2022. The recovery rating remains at 5, indicating 10% to 30% expected default recovery.
Also affirmed included the CCC+ rating on the company's $243 million subordinated notes due 2020 and $341 million subordinated notes due 2021. The recovery rating remains at 6, indicating 0 to 10% expected default recovery.
The proceeds from the proposed term loan and additional notes will be used to repay outstanding balances under the company's term loans B-1 and B-2, and repay the company's $250 million subordinated notes due 2018.
The ratings reflect a forecast that the company’s adjusted EBITDA coverage of interest will remain at about 2x through 2018, S&P said.
The company is expected to prioritize the use of free cash flow for debt repayment, which partially mitigates the currently high leverage, the agency said.
The company has a solid position as the second-largest global gaming equipment and lottery company, which underpins the satisfactory assessment of the company's business risk profile, S&P said.
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