UK-based bingo operator Jackpotjoy secured a £388.5 million ($519 million) senior secured term and revolving credit facility, comprised of a £375 million ($500 million) equivalent term loan and a £13.5 million ($18 million) revolving credit facility. Proceeds from the term facility will be used to repay the existing first and second lien term loans.
The term facility comprises two committed tranches of £250 million ($334 million) and €140 million ($167 million), has a maturity of seven years and weighted average interest rate of 4.91% above LIBOR / Euribor, with step downs of an additional 0.75% based on future leverage ratios and credit ratings.
The revolver is one tranche of £13.5 million ($18 million) and has a maturity of six years and an interest rate of 4.25% above LIBOR, with step downs.
Upon completion of the new facilities (estimated mid-December), the company’s annual cash interest payments will be reduced by approximately a third, or over £9 million ($12 million) in the first year. Pro forma total net leverage (including earn-out obligations) is 3.40x, in line with the 3.35x adjusted net leverage reported at 30 September 2017.
Standard & Poor’s and Moody’s are both expected to issue new credit ratings on the company. Standard & Poor’s is expected to maintain its rating at B+, whereas Moody’s is expected to upgrade the company’s rating to B1.
“We are thrilled to have secured the new facilities which clearly demonstrates the growth as well as stability of our underlying businesses. The significant reduction in interest costs, alongside further future rate reductions, allows us to further drive shareholder value through accelerated deleveraging and investment in the long-term growth of the business,” said Keith Laslop, CFO.
Macquarie Corporate Holdings (UK Branch) and Nomura International acted as joint arrangers and joint physical bookrunners of the facilities.
Jackpotjoy is the parent company of an online gaming group that provides entertainment to a global consumer base through its subsidiaries.