S&P assigns B+ to Scientific Games loan

S&P said it affirmed its ratings on Scientific Games Corp., including its B corporate credit rating. The outlook is stable.

At the same time, S&P assigned a B+ issue-level rating and 2 recovery rating to the company's proposed $3.3 billion term loan B-4 due 2024. The 2 recovery rating reflects an expectation for substantial recovery (70% to 90%; rounded estimate: 80%) for lenders in the event of a payment default.

Scientific Games plans to use proceeds from the proposed term loan B-4 to refinance its existing term loan B-3. S&P will withdraw its ratings on the term loan B-3 once it is fully repaid.

“The affirmation of our B corporate credit rating reflects our expectation for adjusted EBITDA coverage of interest to remain around 2x through 2018 and for the company to prioritize the use of free cash flow for debt repayment, which we believe partially mitigates currently high leverage,” S&P said in a news release.

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