Scientific Games gets credit facility amendments needed to compete for Italian lottery license

By Angela McDaniels

Tacoma, Wash., Oct. 2 - Scientific Games International, Inc. amended its credit facility on Wednesday, according to an 8-K filing with the Securities and Exchange Commission.

The facility is guaranteed by parent company Scientific Games Corp., which said the primary purpose of the amendment is to allow it to participate in the competitive tender process for a license to sell instant lottery tickets under the Gratta e Vinci lottery in Italy.

The amendment provides that certain payments, costs and obligations made or incurred by the company or its subsidiaries in connection with any award of a license to operate the instant ticket lottery will be permitted, subject to certain limitations, under the credit agreement covenant restricting investments.

Some of the financial ratios required under the facility were revised in connection with the amendment.

Scientific Games must maintain a consolidated leverage ratio of no more than:

• 4.75 to 1 for the fiscal quarter ending Dec. 31 through Dec. 31, 2010;

• 4.50 to 1 for the fiscal quarter ending March 31, 2011 through Dec. 31, 2011;

• 4.25 to 1 for the fiscal quarter ending March 31, 2012 through Sept. 30, 2012; and

• 4.00 to 1 for the fiscal quarter ending Dec. 31, 2012 and thereafter.

The consolidated senior debt ratio must be no more than 2.75 to 1 for the fiscal quarter ending Dec. 31 through Dec. 31, 2010 and no more than 2.50 to 1 thereafter.

The consolidated interest coverage ratio must be no less than 3.00 to 1 for the four consecutive fiscal quarters ending Dec. 31 and thereafter.

The interest rates will be unchanged, except that an interest rate level will be added to the top of the pricing grid so that the rate will be Libor plus 325 basis points if the consolidated leverage ratio is 4.25 to 1 or greater.

The amendment also provides that the commitment fee for the revolving credit facility will be 0.50% per year if the consolidated leverage ratio is less than 4.25 to 1 or 0.75% per year otherwise.

In connection with the amendment, Scientific Games International agreed to pay about $2.8 million in fees to the consenting lenders and JPMorgan Chase Bank, NA, the administrative agent.

Scientific Games is a New York supplier of technology-based products, systems and services to gaming markets.

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