Scientific Games $2.3 billion term B talked at Libor plus 275-300 bps

By Sara Rosenberg

New York, May 17 - Official price talk on Scientific Games International Inc.'s $2.3 billion seven-year covenant-light term loan B emerged at Libor plus 275 basis points to 300 bps with a 1% Libor floor and an original issue discount of 991/2, according to a market source.

The term loan has 101 soft call protection for six months, amortization of 1% per annum and a springing maturity.

Included in the deal is an excess cash flow sweep of 50% starting in fiscal years 2014, stepping down to 25% when net first-lien leverage is 3 times and 0% when net first-lien leverage is 2.5 times.

The company's $2.6 billion senior secured credit facility (Ba2/BB-) also includes a $300 million five-year revolver that is already fully syndicated.

There is a $350 million incremental allowance plus an amount where pro forma net first-lien leverage is 3 times or less, subject to 50 bps MFN with 18-month sunset.

Commitments are due on May 21, and funding is expected to occur in the fall.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and UBS Investment Bank are the arrangers on the deal.

Proceeds will be used to help fund the acquisition of WMS Industries Inc. for $26.00 in cash per common share, or about $1.5 billion total, and to refinance credit facilities at both companies.

Net senior secured leverage is 3.2 times, and net total leverage is 4.5 times.

Closing on the acquisition is subject to WMS shareholder approval, which was obtained on Friday, regulatory approvals and other customary conditions.

Scientific Games is a New York-based provider of customized, end-to-end gaming solutions to lottery and gaming organizations. WMS is a Waukegan, Ill.-based designer, manufacturer and marketer of video and mechanical reel-spinning gaming machines, video lottery terminals and in gaming operations.

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