On September 10, the London office of International Game Technology (IGT) announced the issuance of senior secured notes on the Dublin stock exchange. The purpose of these notes, due in 2030, is to immediately retire $499.9 million in low-interest debt that comes due next year.
Fitch Ratings took the news in stride, not changing its positive, BB+ evaluation of IGT debt. Nor did it think the issue would affect the BBB- rating on IGT’s senior secured debt. “Fitch Ratings expects the refinancing to be like-for-like, with no change to the company’s Issuer Default Rating,” wrote Fitch analysts.
The analysts projected a 3.2-times-cash-flow leverage on IGT, stable with the second quarter. They also credited the company’s action with enhancing the company’s debt-maturity profile.
The new debt is in euros, with which Fitch was also comfortable. Analysts said the purpose of the denomination change was to “help the company balance and match its cash flow and debt after the sale of its Gaming & Digital business, which is planned by end 3Q25.”
That refers to the $6.3 billion agreement reached in July to spin off IGT’s game-technology and digital arms to Apollo Management. That transaction also embraces the outright acquisition by Apollo of Everi Holdings.
“IGT will receive $4.05 billion of gross cash proceeds and we expect the remaining company, a pure play in the lottery business that will change its name and ticker on the New York Stock Exchange at transaction close, to allocate $2 billion to pay down existing debt,” wrote the Fitch staff. They added that a “substantial” portion of the $4 billion going to IGT would be returned to shareholders in some form.
IGT was last evaluated by Fitch on March 1 of this year. At that time, IGT was rated “market watch positive.” Fitch’s rating “reflected the creation of the pure play lottery business, which has a leading market position.”
Analysts said they expect IGT to continue to have resilient and predictable cash flow, in addition to simplifying its capital structure post-spinoff. Given the anticipated liquidity, they expect IGT’s leverage to drop below three times cash flow.
