International Game $75 million over-allotment exercised, pushing convertibles offer to $900 million

By Jennifer Chiou

New York, Dec. 20 - International Game Technology Inc. announced that underwriters fully exercised a $75 million greenshoe, augmenting its issue of convertible senior debentures due Dec. 15, 2036 to $900 million.

After the close on Dec. 14, the company priced $825 million of 30-year convertibles at the cheap end of talk, at a coupon of 2.6% and an initial conversion premium of 35%, and reoffered at 98.625.

The debentures were originally offered at par, and talked at a coupon of 2.1% to 2.6% and an initial conversion premium of 35% to 40%.

Banc of America, Merrill Lynch, Goldman Sachs, Wachovia, UBS Investment Bank, Deutsche Bank and Bear Stearns were the bookrunners for the Rule 144A offering.

The debentures are non-callable for the first three years. They may be put in years three, five, 10, 15, 20 and 25.

The debentures have a contingent conversion hurdle at 130% of the conversion price and contingent payment at 120%.

The convertibles have dividend and takeover protection. There is a net-share settlement feature.

The company also announced the redemption of its $499.7 million of zero-coupon convertible debentures due Jan. 29, 2033. It will use some proceeds from the recent offering.

International Game, a Reno, Nev.-based maker of gaming machines and systems, said it also used about $225 million of the proceeds and cash on hand to concurrently buy back $225.4 million of its shares.

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