Casino equipment and online games provider Light & Wonder Inc – previously known as Scientific Games Corp – has retired an existing US$4.0 billion term loan and redeemed US$3.0 billion of its secured and unsecured notes. It did so by making use of proceeds from the announced divestiture of its lottery business and a new US$2.2 billion term loan facility.
In conjunction with the new term loan, Light & Wonder also entered into a new US$750-million revolving credit facility, the firm said in a press release issued on Thursday.
Light & Wonder said the move reflected “successful execution” of the firm’s “balanced and opportunistic approach to capital allocation”. Such approach, it said, prioritised debt reduction, share buy-backs “to return substantial capital to shareholders”, and “disciplined investment in key growth opportunities”.
The latest financial operations reduced Light & Wonder’s principal amount of debt outstanding by US$4.8 billion, to US$4 billion, the firm said. The company added it estimated an annualised cash interest saving of US$225.0 million as a result of these actions.
Light & Wonder chief executive Barry Cottle said in prepared remarks featured in the release: “The steps we are taking to strengthen our balance sheet will enhance our ability to create value and the speed at which we can unlock that value and achieve our vision of becoming the leading cross-platform global game company.”
The release also featured comments from Light & Wonder chief financial officer Connie James. “We were very pleased with the market’s response to our debt transaction, which allowed us to achieve favourable pricing and improve our credit ratings,” she was quoted as saying.
Light & Wonder completed earlier this month the sale of its lottery business to Brookfield Business Partners LP and the latter’s institutional partners. The deal was first announced in October last year. According to a previous announcement by Light & Wonder, the sale of its lottery business was expected to generate US$5.8 billion in gross cash proceeds and approximately US$5.0 billion of net after-tax cash proceeds.
Light & Wonder is also selling its sports betting business: the deal is expected to close in the third quarter this year. The firm is to get US$1 billion in cash and US$200 million in stock from the acquiring business, United States-listed Endeavor Group Holdings Inc, a sports and entertainment firm.
Scientific Games announced last month that it would rebrand itself as Light & Wonder Inc in the second quarter this year, as the “culmination of a year-long strategic process” of restructuring.
