By Paul Deckelman
New York, Oct. 2 – Scientific Games Corp. priced an issue of eight-year notes (B1/B+) at par to yield 5%, high-yield syndicate sources said Monday.
Not all terms of the quick-to-market deal, led by J.P. Morgan Securities LLC, were immediately available at press time.
The syndicate sources said the notes would come with three years of call protection.
Initial yield guidance on the deal was 5% to 5¼%
Prior to the pricing, a trader said that the deal was playing to $800 million of orders in the early afternoon.
The company – a Las Vegas-based provider of technology-based gaming systems, related products and services – had earlier announced that it planned to offer $350 million senior secured notes in a Rule 144A/Regulation S transaction via its wholly owned subsidiary, Scientific Games International, Inc.
It said that the notes would be guaranteed on a senior basis by Scientific Games and certain of its subsidiaries and would be secured by liens on the same collateral that secures indebtedness under Scientific Games’ existing credit agreement and its outstanding 7% senior secured notes due 2022.
The company said that it intends to use the net proceeds of the notes offering – together with cash on hand and borrowings under its existing revolving credit facility – to finance its pending acquisition of NYX Gaming Group Ltd. and its subsidiaries, including the refinancing of certain NYX indebtedness of NYX, and to pay related fees and expenses.
NYX Limited is a Las Vegas-based digital gaming provider. Under terms of the agreement announced by the two companies on Sept. 20, Scientific Games will acquire all of the outstanding ordinary shares of NYX – which are listed on the TSX Venture Exchange in Toronto for C$2.40 per share, equivalent to an enterprise value of approximately C$775 million, or approximately US$631 million.
Scientific Games said that its notes offering would not be conditioned upon the consummation of the NYX acquisition, adding that if the NYX acquisition were not consummated for any reason, it would instead use the net proceeds from the offering for general corporate purposes, which may include the prepayment of term loan borrowings under its existing credit agreement.
Paul A. Harris contributed to this report
| Issuer: | Scientific Games Corp., via Scientific Games International, Inc.
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| Security: | Senior secured notes
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| Maturity: | Oct. 15, 2025
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| Bookrunner: | J.P. Morgan Securities LLC
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| Coupon: | 5%
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| Price: | Par
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| Yield: | 5%
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| Call protection: | Three years
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| Trade date: | Oct. 2
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| Distribution: | Rule 144A/Regulation S
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| Price talk (initial): | 5% to 5¼%
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| Marketing: | Quick-to-market
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