GGRAsia – Everi gets extra US$125mln loan amid pandemic

Everi gets extra US$125mln loan amid pandemic

Apr 22, 2020 Newsdesk Latest News, Top of the deck, World

Casino technology supplier Everi Holdings Inc says it has acquired a US$125-million incremental term loan and achieved some easing of conditions on an existing senior secured credit agreement with lenders.

Interest charged on the new loan is at the London interbank offered rate (LIBOR) plus 1,050 basis points, with a 1 percent LIBOR floor.

The net proceeds, amounting to US$118 million, were “intended to provide additional liquidity and financial flexibility to better position Everi to withstand the challenging conditions resulting from the novel Covid-19 pandemic and strengthen its operations as industry conditions improve,” Everi said in a Tuesday press release accompanying the regulatory filing on the matter.

Jefferies Finance LLC, was administrative agent and collateral agent on the term loan.

Earlier this month Fitch Ratings Inc said it was downgrading the Everi group’s long-term issuer default ratings (IDRs) to ‘B’ from ‘B+’. The downgrade applied also to the group’s subsidiary Everi Payments Inc, said the ratings agency.

The Everi Payments unit had flagged prior to the Fitch downgrade that the group was seeking the US$125-million loan facility and that it would be used to provide incremental cash liquidity for the group.

Prior to the closing of the incremental financing, the Everi group had a total principal balance outstanding of approximately US$1.06 billion. It was made up of: US$735.5 million on the company’s existing first lien term loan due in 2024; US$35.0 million on its revolving credit facility due in 2022; and US$285.4 million of its 7.50 percent senior unsecured notes due in 2025.

Everi said on Tuesday that it had negotiated amendments to its existing credit agreement. Covenant amendments included: eliminating a financial maintenance condition related to senior secured leverage for each of the remaining quarters in 2020; modifying the compliance threshold in each of the quarters after that; and agreeing changes that “limit the company’s ability to make certain restricted payments and designate unrestricted subsidiaries”.

Michael Rumbolz, Everi chief executive, made reference in the press statement to the wide-scale shutdown of the casino industry around the world in the wake of the novel coronavirus crisis.

He stated: “With our revenue and the associated workload essentially having been reduced to near zero and our limited clarity as to the various timelines when our customers may restart their operations, we have taken prudent actions to position our company to withstand this period of minimal or reduced gaming industry activity.”

Mr Rumbolz added that the incremental financing portion of the arrangement provided Everi with “the flexibility to withstand this current disruption and ensure that as activity resumes we are positioned to support our customers as they reopen for business, bring our employees back to work, and regain the operating and financial momentum we consistently demonstrated prior to the Covid-19 outbreak.”

The group said last month it had implemented “targeted furloughs and company-wide salary reductions” due to the business disruption to the gaming industry caused by the pandemic.