Casino equipment maker and lottery services provider Scientific Games Corp said on Friday it had completed the redemption of all US$250-million of its outstanding 8.125-percent senior subordinated notes due 2018.
The firm said the exercise was “at a redemption price equal to 100 percent of the principal amount of the 2018 notes, plus accrued and unpaid interest to, but not including, the redemption date”.
In the redemption exercise, Scientific Games used a portion of the net proceeds from its offering of US$1.15-billion of 7.0-percent senior secured notes due 2022, which closed on February 14.
“Taking out the 2018 notes could save US$3 million in annual interest expense. Clearly, with leverage at seven times EBITDA [earnings before interest, taxation, depreciation and amortisation], reducing costs and leverage are key,” said analyst Cameron McKnight, from brokerage Wells Fargo Securities LLC, in a note in February.
Between 2013 and 2014, Scientific Games was involved in several leveraged acquisitions of rival gaming equipment suppliers, totalling billions of U.S. dollars in value.
In 2013 it bought slot machine maker WMS Industries Inc for US$1.5 billion. In November 2014, Scientific Games completed a US$5.1-billion deal to acquire Bally Technologies Inc. A year earlier, Bally Technologies had itself taken over Nevada-based SHFL entertainment Inc in a US$1.3-billion transaction.
Scientific Games earlier this month reported a net loss for full-year 2016 of US$353.7 million, down from US$1.39 billion in 2015. The Las Vegas-based company said its revenue grew by 4.5 percent in year-on-year terms to US$2.88 billion. It posted operating income of US$130.6 million for 2016, compared to an operating loss of US$1.02 billion in 2015.
The company said it reduced the principal amount of its total debt by US$169.4 million in 2016, to US$8.02 billion at the end of the year.
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