IGT Amends Credit Facility, Extends Maturity Date

International Game Technology (NYSE:IGT) announced some added financial flexibility, saying it amended a revolving credit facility, providing access to more capital and a longer maturity date.

A bank of IGT’s popular Wheel of Fortune slots. The company is altering some financial accords to save cash. (Image: TheStreet)

The lottery operator and slot machine manufacturer also amended its term loan facilities, gaining another lay of fiscal breathing room in the process.

Among other changes, the revolving credit facility amendment increases the aggregate commitments of the lenders from approximately US$1.68 billion equivalent (US$1.05 billion and €625 million) to approximately US$1.83 billion equivalent (US$820 million and €1.00 billion), extends the final maturity date to July 31, 2027 and reduces the facilities margins by at least 0.25% (0.40% at current debt ratings),” according to a statement issued by the company.

The moves are relevant because IGT reduces its annual interest expense, which meshes with its ongoing efforts to pare debt and firm its balance sheet.

More Important IGT Details

The UK-based gaming technology company provides back-end services and solutions for lotteries and sportsbooks worldwide and manufactures slot machines.

For IGT investors, there are other potential benefits in the revolving credit facility and term loan amendments because the added flexibility could set the stage for the gaming supplier to allocate more cash to acquisitions and shareholder rewards.

“The RCF and TLF amendments, among other changes, (i) increase the annual permitted acquisition limit from 10% to 15% of consolidated total assets and the lifetime permitted acquisition limit from US$2.25 billion to US$2.5 billion and (ii) increase the annual limit on dividends and share repurchases from US$300 million to US$400 million based on the group’s current public debt ratings and to US$550 million if any two public debt ratings are equal to BB+/Ba1 and eliminates such limit if any two public debt ratings are higher than BB+/Ba1,” the company said in the statement.

Translation: The higher IGT’s credit rating trend, the more flexibility the company has to boost buybacks and dividends. IGT yields 4.44% and announced a massive share repurchase program last November.

Interesting IGT Tidbits

While shares of IGT are down 37.70% year-to-date, the name isn’t bereft of catalysts with which to lure investors. In addition to the newly attained financial flexibility above, the gaming company is bolstering its balance sheet.

Add to that its lottery business, one of the world’s largest, delivers the goods. Lottery assets are cash generators and desirable in the investment community. Still, they often don’t get full credit when the parent company has other lines of business, as with IGT.

IGT’s newly created, dedicated iGaming and sports wagering unit could eventually be a spin-off candidate as the company looks for other avenues to unlock shareholder value.

The post IGT Amends Credit Facility, Extends Maturity Date appeared first on Casino.org.

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