GGRAsia – IGT amends revolving credit facilities, term loan

IGT amends revolving credit facilities, term loan

May 14, 2020 Newsdesk Industry Talk, Latest News, Top of the deck

Gaming equipment and lottery services provider International Game Technology Plc (IGT) announced on Wednesday amendments to its revolving credit facilities agreement and term loan facility agreement, including provisions relating to the Covid-19 pandemic.

The firm said in a press release the amendments would modify the two agreements by, among other things, “waiving the covenants requiring IGT to maintain a maximum ratio of total net debt to earnings before interest, taxation, depreciation and amortisation (EBITDA) and a minimum ratio of EBITDA to net interest costs”. The covenant waiver applies from the current quarter through to the end of the second quarter, 2021.

Under the new agreements, IGT is obliged to “maintain minimum liquidity of US$500 million” from now until the second quarter of next year. But the firm also was allowed to increase the maximum ratio of total net debt to EBITDA that IGT is required to maintain for the remaining fiscal quarters covered by the agreements after June 30, 2021.

The company is meanwhile barred from distributing dividends and carrying out share repurchases through June 30, 2021. Dividend distributions and share repurchases after that will only be possible if IGT’s ratio of total net debt to EBITDA is below agreeded thresholds.

The new agreements provide that from January 20 this year through August 31, 2021, “cessations and suspensions of business arising from the Covid-19 pandemic will not constitute an event of default” for IGT.

In comments included in the firm’s press release, company chief financial officer Max Chiara said the amendments would provide IGT “flexibility to navigate the near-term uncertainty caused by the Covid-19 pandemic, and demonstrate the strong support we are receiving from our banking group.”

Bank of America Securities and Mediobanca – Banca di Credito Finanziario SpA, acted as IGT’s global coordinators with respect to the amendments, said the firm.

IGT said in early April it would introduce a “temporary furlough programme” for 2,300 employees in North America. The temporary furlough programme in the company’s North American operations was due to last eight weeks starting from April 6. The firm said at the time the decision to implement such a scheme was linked to the “significant impact” the Covid-19 pandemic had had on many of IGT’s customers.