Scientific Games sets talk for $2.9 billion two-part notes offering

By Paul A. Harris

Portland, Ore., Nov. 13 – Scientific Games International Inc. set price talk in its $2.9 billion two-part offering of high-yield notes on Thursday, according to a market source.

A $700 million tranche of seven-year senior secured notes (Ba3/BB-), in the market as a Rule 144A and Regulation S for life offer and callable after three years at par plus 75% of the coupon, is talked to yield 7% to 7¼%, on top of early guidance, sources said.

A $2.2 billion tranche of eight-year senior unsecured notes (Caa1/B), in the market as a Rule 144A and Regulation S with registration rights offer and coming with four years of call protection, is talked with a 10% coupon at a discount to yield 11¾% to 12%. Yield talk on the unsecured tranche comes dramatically wider than early guidance of 9½% to 10%, according to sources.

Books close at 11 a.m. ET on Friday, and the deal is set to price on Friday afternoon.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Deutsche Bank Securities Inc. Fifth Third Bank, HSBC and PNC Capital Markets are the joint bookrunners.

Proceeds will be used to help fund the acquisition of Bally Technologies Inc. for about $5.1 billion, including about $1.8 billion of net debt.

Scientific Games is a New York-based developer of technology-based products and services and associated content for gaming and lottery markets. Bally Technologies is a Las Vegas-based provider of games, table game products, systems, mobile and iGaming services to gaming operators.

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