Scientific Games sets Tuesday launch for $2.3 billion term loan B

By Sara Rosenberg

New York, May 10 - Scientific Games International Inc. has scheduled a bank meeting for 10:30 a.m. ET in New York on Tuesday to launch its proposed $2.3 billion seven-year covenant-light term loan B, according to a market source.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and UBS Investment Bank are the arrangers on the deal.

The loan has 101 soft call protection for six months, amortization of 1% per annum and a springing maturity, the source said.

Proceeds will be used to help fund the acquisition of WMS Industries Inc. for $26.00 in cash per common share or about $1.5 billion total, and refinance credit facilities at both companies.

Based on filings with the Securities and Exchange Commission, it is expected that the company will get a $300 million five-year revolver in addition to the term loan B.

Official price talk is not out yet. However, the filings had the term loan B expected at Libor plus 300 basis points with a 1% Libor floor and the revolver anticipated at Libor plus 300 bps with a 50 bps unused fee.

The filings also said that the term loan B would have 101 repricing protection for one year, whereas the official talk is for six months of call protection.

Pro forma leverage is around 5 times without synergies and about 4.4 times with synergies.

Excluding anticipated synergies, the companies generated combined revenue of about $1.6 billion and combined attributable EBITDA of around $579 million over the trailing 12-month period ended Sept. 30, 2012.

Closing is expected by year-end, subject to WMS shareholder approval, which was obtained on Friday, regulatory approvals and other customary conditions.

Scientific Games is a New York-based provider of customized, end-to-end gaming solutions to lottery and gaming organizations. WMS is a Waukegan, Ill.-based designer, manufacturer and marketer of video and mechanical reel-spinning gaming machines, video lottery terminals and in gaming operations.

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