GTECH has moved a step closer to acquiring US gaming supplier International Game Technology (IGT) following the successful pricing of a series of senior secured notes worth approximately $5.0bn.
The senior secured notes have been denominated in US dollars ($3.2bn) and Euros (€1.6bn), and are equivalent in aggregate to approximately $5.0bn at yesterday’s exchange rate.
Subject to customary closing conditions, the notes are part of the company’s financing for the acquisition of IGT.
GTECH said that the offering was conducted through a special purpose vehicle issuer, Cleopatra Finance Limited, which will place the proceeds from the offering into escrow, pending the consummation of the acquisition of IGT.
In connection with the acquisition of IGT, GTECH will merge with and into Georgia Worldwide (NewCo) and the ordinary shares of NewCo will be listed on the New York Stock Exchange.
At such time, NewCo will become the issuer of the notes and will use the proceeds from the offering to pay the cash component of the merger consideration for the acquisition of IGT, and acquisition-related costs and possibly to refinance certain existing indebtedness of GTECH and IGT.
Application has been made to list the notes on the Global Exchange Market of the Irish Stock Exchange.
“The debt of the new combined entity will have an average tenor of more than 6 years and no significant maturity before 2018,” said Alberto Fornaro, GTECH executive vice president and chief financial officer. “It is the inaugural issuance in the US and the first time we have launched a global deal, very large in size and we were over-subscribed. Overall, this is another important step toward the close of the IGT transaction."
The principal terms of each tranche of the notes will be:
• $600m aggregate principal amount of 5.625 per cent senior secured notes due 2020
• $1,500m aggregate principal amount of 6.250 per cent senior secured notes due 2022
• $1,100m aggregate principal amount of 6.500 per cent senior secured notes due 2025
• €700m aggregate principal amount of 4.125 per cent senior secured notes due 2020
• €850m aggregate principal amount of 4.750% senior secured notes due 2023
Upon the release of the proceeds from the offering from escrow, the notes will be guaranteed by certain subsidiaries of NewCo, and will be secured by certain assets of NewCo and its subsidiaries.
The notes have been rated BB+ and Ba2 by Standard & Poor’s Ratings Services and Moody’s Investor Services, respectively.
Shares in GTECH S.p.A (Co. Data) (MIL:GTK) were trading at €17.00 per share in Milan earlier this morning following the announcement.