GTech’s IGT deal sparks a credit downgrade
GTech SpA, a supplier of lottery and casino equipment in regulated markets, on Thursday said that Standard & Poor’s Rating Services had lowered its corporate credit rating to ‘BBB-’ from ‘BBB’.
The ratings service also lowered its short-term rating to ‘A-3’ from ‘A-2’. S&P is also lowering its ratings on GTech’s senior unsecured debt to ‘BBB-‘ from ‘BBB’, and lowered its ratings on the company’s subordinated debt to ‘BB’ from ‘BB+’.
The downgrades follow GTech on Wednesday saying that the company intends to acquire Nevada-based casino slot machine maker International Game Technology (IGT) for a total consideration of US$4.7 billion in cash plus acquisition of US$1.7 billion debt.
On Thursday Moody’s Investors Service stated it was placing GTech and IGT on review for downgrade following the merger announcement.
“The combined entity will have over US$6 billion in revenues and over US$2 billion in EBITDA based on the last twelve trailing months as of March 31, 2014,” said Moody’s.
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