IGT Amends Credit Facility, Extends Maturity Date

IGT Amends Credit Facility, Extends Maturity Date

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

IGTA 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 layer 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 , 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 worldwide, and manufactures slot machines.

For IGT investors, there are other potential benefits in the revolving credit facility and term loan amendments. 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 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. 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 could eventually be a spin-off candidate, as the company looks for other avenues to unlock shareholder value.

Mohegan Sun Pocono Cop Charged with Promoting Illegal Gambling, Prostitution  College Football Playoff Preview: Georgia, Michigan Favored to Reach Final  Disney Ups Spend to Defeat Casino Expansion in Florida  Japan Gambling Age Will Remain at 20 Despite Potential Adulthood Classification Change  Minnesota Charitable Gambling Delivers More Money to Government Than Nonprofits  Tiger Woods PGA Championship Favorite, 15-Time Major Winner at 10/1 to Win at Bethpage Black  Valve Trying to Save Skin, as Gaming Company Begins Blocking Team Fortress Exchanges  Durant’s Calf Strain Leaves NBA Playoff Odds in Flux for Warriors  Las Vegas Strip Sees 12 Tons of Wet New Year’s Eve Trash Cleared  2020 NFL Draft in Las Vegas Spikes Hotel Rates, Strip Rooms Soar More Than 1,000 Percent