US gaming and lottery supplier Scientific Games Corporation has announced the pricing of $3.15bn of new senior notes in conjunction with the company's pending acquisition of Bally Technologies.
The new senior notes will consist of $950m in aggregate principal amount of 7.0 per cent senior secured notes due January 1st 2022, and $2,200m in aggregate principal amount of 10.0 per cent senior unsecured notes due December 1st 2022.
The company, through its indirect wholly owned subsidiary SGMS Escrow Corp (SGE), will receive approximately $933m in net proceeds from the issuance of the Secured Notes and $2,156m in net proceeds from the issuance of the Unsecured Notes.
Scientific Games said that it intends to use the net proceeds of the notes offering to finance the Bally acquisition, including the refinancing of approximately $1.9bn of Bally debt and the payment of fees and expenses related to the acquisition and the financing transactions.
The notes will be combined with the company’s cash, together with Bally's cash, $2,000m of incremental term loans under the previously disclosed escrow credit agreement, and $200m of borrowings under Scientific Games' revolving credit facility, to fund the deal.
Upon the closing of the notes offering, all of the financing required in connection with the Bally acquisition will have been completed.
The offering is currently expected to close later this week on November 21st. Promptly following the closing of the Bally acquisition, SGE will merge with and into Scientific Games International (SGI), with SGI as the surviving entity and assuming all of SGE's obligations under the notes and the incremental term loans, which will be guaranteed by Scientific Games and certain of its subsidiaries.
Completion of the Bally acquisition is subject to approval by Bally's stockholders, receipt of certain gaming regulatory approvals and other customary closing conditions.
Shares in Scientific Games Corporation (Co. Data) (NASDAQ:SGMS) closed at $12.81 per share in New York Friday.