Light & Wonder, Inc., previously known as Scientific Games Corporation, announced a major milestone in transforming and deleveraging its balance sheet. The company retired its existing $4 billion term loan and redeemed $3 billion of its secured and unsecured notes, using proceeds from the divestiture of its lottery business and a new $2.2 billion term loan facility.
In conjunction with the new term loan, the company also entered into a new $750 million revolving credit facility.
The moves slashed the supplier’s debt load in half, reducing the principal amount of debt outstanding by $4.8 billion. The company estimates an annualized cash interest savings of $225 million as a result of the actions.
In addition, the covenant-light nature of the new term loan facility provides Light & Wonder with the flexibility to execute on its capital allocation priorities. The company also is continuing to repurchase shares under a $750 million repurchase authorization.
“With the sale of our lottery business, we are making rapid progress executing on our strategy to transform our business,” said Light & Wonder Chief Executive Officer Barry Cottle. “We see tremendous opportunity to create value for our shareholders and other stakeholders by building great games and franchises to entertain our players wherever and whenever they want to play.
“The steps we are taking to strengthen our balance sheet will enhance our ability to create value and the speed at which we can unlock that value and achieve our vision of becoming the leading cross-platform global game company.”
Light & Wonder Chief Financial Officer Connie James added, “The debt reduction and refinancing is yet another monumental milestone in our efforts to strengthen our financial position and advance our capital allocation strategy. We were very pleased with the market’s response to our debt transaction, which allowed us to achieve favorable pricing and improve our credit ratings.
“This transaction optimizes our capital structure and provides the balance sheet integrity and financial flexibility to invest in future growth. We are strongly positioned to drive tremendous shareholder value.”