Moody’s assigns Caa1 to Scientific Games notes, trims ratings

Moody’s Investors Service said it assigned a Caa1 rating to Scientific Games International, Inc.’s proposed $1.2 billion senior unsecured notes.

The company’s senior secured revolver, term loan and senior secured notes were downgraded to B1 from Ba3. The downgrade reflects the reduction in junior debt, the agency said.

The company’s existing senior unsecured notes and senior subordinated notes were affirmed at Caa1.

Moody’s also assigned Scientific Games International Inc. a B2 corporate family rating, B2-PD probability of default rating, SGL-2 speculative grade liquidity rating and stable outlook.

Proceeds along with a combination of balance sheet cash and revolver draw, will be used to repay the company’s remaining $1.2 billion 10% senior unsecured notes due 2022 and $244 million 6¼% senior subordinated notes due 2020, as well pay related premiums, fees and expense.

“The company’s B2 CFR reflects the benefits of the refinancing transaction which will reduce annual cash interest expense by over $40 million and extend the company’s debt maturity profile. The proposed transaction is largely debt neutral, should be accretive to the company’s free cash flow and aligns with Moody’s expectation for continued reduction in leverage from current levels,” said Moody’s in a press release.

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