S&P eyes International Game positively

S&P said it placed International Game Technology plc’s ratings, including its BB+ issuer rating, on CreditWatch with positive implications.

International Game Technology agreed to spin off its global gaming and playdigital segments and merge them with Everi Holdings Inc. to create a new company in which IGT shareholders will own a 54% stake. The transaction is expected to close by early 2025, subject to regulatory approvals.

In connection with the deal, IGT will get about $2.6 billion in cash funded with debt borrowed by the new company. IGT plans to use at least $2 billion to repay debt.

“We expect to address the CreditWatch placement once we are confident the proposed transaction can achieve regulatory, shareholder, and other approvals prior to expected closing by early 2025. We will assess the IGT lottery's business position, pro forma capital structure, and long-term financial policy as more information becomes available.

“While we would likely raise the rating by at least one notch, we could raise the rating by two notches if we expect IGT to sustain leverage below 3x, incorporating periodic, large, upfront payments and capital investments to extend lottery contracts, dividends, share repurchases, and operating volatility,” S&P said in a press release.

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