Scientific Games ups term loan B-2 to $2 billion, flexes higher

By Sara Rosenberg

New York, Sept. 16 – Scientific Games Corp. increased its seven-year incremental covenant-light term loan B-2 to $2 billion from $1,735,000,000 and raised pricing to Libor plus 500 basis points from talk of Libor plus 425 bps to 450 bps, according to market sources.

The term loan B-2 still has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

The company’s now $2.35 billion of incremental senior secured bank debt (BB-), up from $2,085,000,000, also includes a $350 million revolver due Oct. 18, 2018.

With this transaction, the company sought an amendment to its existing $300 million senior secured revolver due Oct. 18, 2018 and $2,289,000,000 senior secured term loan B due Oct. 18, 2020 to allow for the new debt.

As part of the amendment, pricing on the existing term loan B is being revised to match term loan B-2 pricing, and the existing B loan is getting the 101 soft call protection for one year.

Earlier in syndication, the amendment was changed from original plans to set pricing on the existing term loan B at 25 bps lower than the final spread on the term loan B-2, and the proposed call protection on the new B-2 loan and the existing B loan was extended from six months.

Lenders are getting a 25 bps amendment fee.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Fifth Third Securities Inc., HSBC Securities (USA) Inc. and PNC Capital Markets LLC are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Bally Technologies Inc. for $83.30 per share in cash, for a total transaction value of about $5.1 billion, including net debt of around $1.8 billion.

Other funds for the transaction will come from notes and cash on hand.

Closing is anticipated by year-end, subject to receipt of Bally shareholder approval, gaming regulatory approvals and other customary conditions.

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 solutions to gaming operators.

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