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.
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 reduces its annual interest expense, which meshes with its ongoing efforts to pare debt and firm its balance sheet.
More Important IGT Details
The mix of The UK-based gaming technology of poker games company provides back-end services and solutions for lotteries and sportsbooks 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 share repurchase program 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 iGaming and sports wagering unit could eventually be a spin-off candidate, as the company looks for other avenues to unlock shareholder value 카지노사이트.
International Game Technology Amends Credit Facility, Saving $65 Million Annually
International Game Technology (NYSE:IGT) has amended its term loan facility. The move will save the gaming supplier $65 million a year.
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 the 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 the 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 바카라사이트 million in 2027, when the loan matures. The company is on pace with 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.
IGT Sees 2022 Revenue Up to $4.3B, Reveals Buyback Plan, iGaming Spin-Off Possible
International Game Technology (NYSE:IGT) said it expects 2022 revenue of $4.1 billion to $4.3 billion — a forecast that is on the high side tops Wall Street’s outlook of $4.2 billion.
The gaming device manufacturer delivered that top-line guidance at its virtual investor day today. It also revealed plans for a $300 million, multi-year share repurchase program. That’s the first buyback plan in the company’s history, and arrives a week after the maker of the popular Wheel of Fortune slot machines said it’s reinstating its quarterly dividend of 20 cents a share.
The UK-based gaming technology company, which also provides back-end services and solutions for lotteries and sportsbooks around the world, adds that it expects 2025 sales of $4.6 billion to $5 billion, implying a mid-single-digit compound annual growth rate (CAGR).
Over the next four years, we are confident we can deliver accelerating organic growth, significant margin expansion, and robust free cash flow to drive stakeholder value and increased shareholder returns,” said CEO Marco Sala in a statement.
In the US, IGT has partnerships in more than half the states where sports wagering is currently live and legal. Its lottery unit is also delivering strong performances.
IGT Buoyant Outlook Rooted in Cash Capabilities
Over the course of 2021, IGT has been making a series of moves aimed at reducing leverage, while enhancing its cash position and margins. It appears those actions are paying dividends READ MORE.