Light & Wonder cuts debt to $4 billion from $8.8 billion
Online casino and gaming equipment provider Light & Wonder Inc – formerly known as Scientific Games Corp – canceled an existing US$4.0 billion term loan and repaid US$3.0 billion Americans of its secured and unsecured notes. To do so, it used proceeds from the announced sale of its lottery business and a new US$2.2 billion term loan facility.
Along with the new term loan, Light & Wonder has also entered into a new US$750 million revolving credit facility, the company said in a press release on Thursday.
Light & Wonder said the move reflected the company’s “successful execution” of the company’s “balanced and opportunistic approach to capital allocation.” Such an approach, he said, prioritizes debt reduction, share buybacks “to return substantial capital to shareholders” and “disciplined investments in key growth opportunities.”
The latest financial transactions reduced Light & Wonder’s principal outstanding debt by $4.8 billion to $4 billion, the company said. The company added that it estimates an annualized cash interest savings of US$225.0 million as a result of these actions.
Light & Wonder Chief Executive Barry Cottle said in prepared remarks in the release: “The steps we are taking to strengthen our balance sheet will improve our ability to create value and the speed at which we can unlock that value and achieve our vision of becoming the world’s leading cross-platform games company.
The statement also included comments from Light & Wonder’s chief financial officer, Connie James. “We were very pleased with the market response to our debt transaction, which resulted in favorable pricing and improved credit ratings,” she said.
Light & Wonder wrapped up earlier this month on sale of its lottery business to Brookfield Business Partners LP and its institutional partners. The deal was first announced in October last year. According to an earlier announcement from Light & Wonder, the sale of its lottery business was expected to generate US$5.8 billion in gross cash proceeds and approximately US$5.0 billion in net after-tax proceeds.
Light & Wonder is also sell your sports betting business: the transaction is expected to close in the third quarter of this year. The company is to secure $1 billion in cash and $200 million in stock from acquiring U.S.-listed Endeavor Group Holdings Inc, a sports and entertainment company.
Science games announced last month that it would rebrand itself as Light & Wonder Inc in the second quarter of this year, as “the culmination of a year-long strategic process” of restructuring.