• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Features
  • Industry Talk
  • Trends & Tech
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Sci Games loan rejig aids cash flow, deleverage: analyst

Aug 16, 2017 Newsdesk Industry Talk, Latest News, Top of the deck  


Sci Games loan rejig aids cash flow, deleverage: analyst

Following the latest amendment to its credit agreement, casino equipment and lottery services provider Scientific Games Corp should be able to accelerate the rate at which it slims some of its US$18-billion debt pile, says a Tuesday note from brokerage Union Gaming Securities LLC.

The amended credit agreement brought the applicable margin for Scientific Games’ term loans to 3.25 percent per annum for “eurodollar” London Interbank Offered Rate (LIBOR) loans, and 2.25 percent per annum for base rate loans. No LIBOR floor is applicable for the 3.25-percent term loans.

“In total, the 75-basis point reduction in the interest rate will save the company US$25 million annually. Relative to our model, the better pricing nets about US$12 million of incremental interest savings in 2018,” said Union Gaming analyst John DeCree in the Tuesday note.

The analyst expected that the reduction in interest rate will accelerate the free cash flow of Scientific Games, which will begin to have a greater impact on the firm’s debt reduction.

“We are currently modelling Scientific Games net leverage to hit below 6.5 times by year end and below 6.0 times by the end of 2018,” Mr DeCree said in the note.

“We believe Scientific Games could be heading towards a credit ratings upgrade sooner than later, which would be another catalyst for the equity and set the stage for further capital structure improvements,” he added.

The analyst also mentioned Scientific Games’ “most expensive debt” – US$2.2-billion of 10-percent senior unsecured bonds, which will become callable at 105 percent of the principal amount in December 2018.

“If this pace of deleveraging continues, the refinancing of the 10 percent notes could be a substantial catalyst for the equity,” said Mr DeCree in the note.

He believes that the Global Gaming Expo in Las Vegas in October will be promising for Scientific Games, and expected that the fourth quarter of 2017 and the first quarter of 2018 will be strong for the firm.


  • tweet
Related articles
  • Melco likely to take on more debt for expansion: Moody’s
    Melco likely to take on more debt for...

    Jan 20, 2021  

  • Suncity listco says bond rejig most feasible finance option
    Suncity listco says bond rejig most...

    Nov 13, 2020  

More news
  • Visitors stayed longer in Macau in 2020, says govt
    Visitors stayed longer in Macau in...

    Jan 20, 2021  

  • Suntrust gets OK for unit handling hotel, tourism biz
    Suntrust gets OK for unit handling...

    Jan 20, 2021  


Latest News

Melco likely to take on more debt for expansion: Moody’s

Melco likely to take on more debt for expansion: Moody’s

Jan 20, 2021  

Moody’s Investors Service Inc says it expects the ratio of adjusted debt to earnings before interest, taxation, depreciation and amortisation (EBITDA) of Macau casino operators Melco Resorts and...
Read More
Visitors stayed longer in Macau in 2020, says govt

Visitors stayed longer in Macau in 2020, says govt

Jan 20, 2021  

Suntrust gets OK for unit handling hotel, tourism biz

Suntrust gets OK for unit handling hotel, tourism biz

Jan 20, 2021  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Partners

Pick of the Day

"The increased focus we can now bring to our gaming and amusement business [after a spin-off of the firm's cash-handling product business] will bring us closer to the customer as we align our offerings more directly with their needs"

Sim Bielak

Global president of casino equipment supplier SuzoHapp



Most Popular

  • CNY 2021 unlikely to boost Macau casinos, say observersCNY 2021 unlikely to boost Macau casinos, say observers January 15, 2021
  • Casino op MGM China to pay most staff discretionary bonusCasino op MGM China to pay most staff discretionary bonus January 18, 2021
  • Wynn and Melco also flag bonus for Macau staffWynn and Melco also flag bonus for Macau staff January 19, 2021
  • Investors see 2H Macau gain, rebound 2022: BernsteinInvestors see 2H Macau gain, rebound 2022: Bernstein January 19, 2021
  • Wakayama casino RFP deadline affirms still 2 suitorsWakayama casino RFP deadline affirms still 2 suitors January 18, 2021
Copyright 2014-2020 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us