International Game Technology Amends Credit Facility, Saving $65 Million Annually

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International Game Technology (NYSE:IGT) has amended its term loan facility, a move that will save the gaming supplier $65 million a year.

IGT debt
IGT debt
A gambler plays an IGT slot machine in Atlantic City. The company is refinancing debt resulting in big interest savings. (Image: Associated Press)

That move is part of an ongoing effort by the company to trim its debt burden, which stood at $7.07 billion at the end of the first quarter, down from $7.17 billion a year earlier. By reconfiguring the credit facility, IGT extends the average maturity of debt to five years.

Based on the current balances and interest rates of the Company’s debt, we expect this transaction and the debt transactions closed earlier this year to result in approximately $65 million in lower annualized interest expense going forward,” said CFO Max Chiara in a statement.

Trimming annual interest expense by $65 million represents potentially significant savings for a company with a market capitalization of $4.24 billion, which is where IGT stands today. In the first three months of 2021, IGT refinanced $1 billion in notes coming due in 2022 and $750 million in commercial paper coming due in 2026. The company has liquidity of $2.1 billion, including cash and credit revolvers.

IGT Interesting Moves

The UK-based gaming technology company provides back-end services and solutions for lotteries and sportsbooks around the world, and also manufacturers slot machines.

By adding new flexibility on the term loan, which originated in 2017, the size of the facility increases to $1.17 billion from $1.01 billion, while the maturity date is pushed out to Jan. 25, 2027. IGT must make nearly $236 million in annual amortization payments in 2024, 2025, and 2026, and almost $472 million in 2027, when the loan matures. The company is on pace for meeting some important debt reduction targets.

Following the sale of IGT’s Italian digital gaming, gaming machine, and sports wagering operations, which was announced last December, leverage should decline to 4x and could prompt the company to reinstate its dividend, according to some analysts.

Good Times for Gaming Supplier Stocks

Broadly speaking, shares of gaming device manufacturers and technology providers are performing well this year and topping land-based casino operators. Up more than 19 percent year-to-date, IGT is participating in that trend.

That upside is being stoked by factors such as recurring businesses, with quickly rebounding attributes in cashless gaming, iLottery, iGaming, and online sports betting.

In the US, IGT has partnerships in more than half the states where sports wagering is currently live and legal. The company’s lottery business is thriving.

In its first-quarter earnings presentation, IGT said same store sales of lottery products jumped 30 percent from the same period in 2019, and second-quarter figures could top 2019 levels by 20 percent or more.

The post International Game Technology Amends Credit Facility, Saving $65 Million Annually appeared first on Casino.org.

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