Moody's rates Lottomatica notes Baa3, Ba2

Moody's Investors Service said it assigned a Baa3 rating to Lottomatica's proposed five or seven year €500 million notes and a Ba2 rating to a proposed €300 million subordinated interest-deferrable capital securities due 2070.

The agency also upgraded the rating of Lottomatica's €750 million subordinated interest-deferrable capital securities due 2066 to Ba2 from Ba3.

Lottomatica's Baa3 senior unsecured rating reflects the company's solid market position in the global lottery gaming market, its position as the market leader in the Italian gaming industry, its solid profitability, its strong track record of winning and retaining new contracts, and its good growth prospects internationally, the agency said.

Key credit risks include higher leverage in 2010 due to debt incurred to finance growth and contract renewals, the agency said.

Ratings are also tempered by the slow growth of US lottery sales and slower than anticipated growth in instant tickets in Italy, the agency noted.

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