
Scientific Games Corp.'s Proposed $1.1 Billion Senior Unsecured Notes Due 2026 Rated 'B-' (Recovery Rating: '5')
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NEW YORK (S&P Global Ratings) March 5, 2019--S&P Global Ratings today assigned
its 'B-' issue-level rating and '5' recovery rating to Las Vegas-based gaming
equipment manufacturer Scientific Games Corp.'s proposed $1.1 billion senior
unsecured notes due 2026. The '5' recovery rating indicates our expectation
for modest recovery (10%-30%; rounded estimate: 10%) for lenders in the event
of a payment default. The proposed notes will be issued by Scientific Games'
direct subsidiary, Scientific Games International, Inc. Scientific Games plans
to use the proceeds from these notes to redeem approximately $1.0 billion of
its $2.2 billion of outstanding 10.000% senior unsecured notes due 2022.
This transaction is modestly credit positive because we expect that the new
2026 notes will feature lower interest rates than the redeemed notes, which
will improve the company's cash flow and interest coverage. Additionally, the
transaction will improve Scientific Games' maturity profile because it extends
the maturity of about $1.0 billion of debt by four years. However, the
transaction is largely a debt-for-debt refinancing and does not alter our
base-case forecast for the company's leverage. Therefore, all of our other
ratings on Scientific Games, including our 'B' issuer credit rating, remain
unchanged.