Moody's rates Scientific Games loans Ba2

Moody's Investors Service said it assigned a Ba2 rating to Scientific Games Corp.'s amended credit facilities and affirmed the company's Ba2 corporate family rating, Ba2 senior debt rating and B1 subordinated debt rating. The outlook is stable.

The amended bank facilities will include a $50 million increase to the existing $250 million senior secured guaranteed multi-currency revolving credit facility and a new $100 million senior secured guaranteed term loan, each due 2009. The increased facilities will be used to provide financing for the recent acquisition of EssNet AB and the potential acquisition of The Global Draw Ltd.

The rating affirmation reflects Moody's expectation that debt to EBITDA will rise only slightly to about 3.5x on a pro-forma basis assuming all acquisitions close and fall to around 3.0x by year-end 2006, due to anticipated earnings growth driven by recent lottery contract renewals and new contracts.

The stable outlook is based on the expectation of continued modest sales and earnings growth from existing lottery contracts, contract extensions and rebids, as well as incremental sales from net new contracts and reflects the company's free cash flow generating ability and good liquidity profile, the agency said.

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