Playtech targets €20m in annualised interest savings following debt refinancing
Playtech has entered into an amended €277m revolving credit facility and will redeem €330m in senior secured notes as part of a refinancing of its existing debt facilities.
A five-year senior secured note worth €530m was first raised in 2018 and is due to mature in October 2023.Playtech will now redeem €330m of the total note on 16 November this year, to be funded using its current cash balances.
Its amended €277m revolving credit facility – originally worth €317m and due to mature in Q4 2023 but now amended to last until 2025 – will remain undrawn following the early redemption of the secured notes.
The refinancing will result in cash interest savings of around €12m in 2023, Playtech said, and will leave the firm with more than €200m of available cash on its balance sheet.
The balance of the outstanding bond will be repaid at maturity or sooner, resulting in total annualised savings of €20m.
After repaying the bond, the only other material debt obligation Playtech will hold beyond its revolving credit facility will be another senior secured note worth €350m, first raised in March 2019 and due to mature in 2026.
Playtech CFO Andrew Smith: “The combination of Playtech’s strong balance sheet and the high cash generation from its operations have enabled the company to carry out this efficient refinancing, in spite of challenging debt market conditions.”
“The combination of Playtech’s strong balance sheet and the high cash generation from its operations have enabled the company to carry out this efficient refinancing, in spite of challenging debt market conditions,” said Andrew Smith, CFO of Playtech.
“We are pleased to have achieved this result, and to have made the significant interest savings that otherwise could have been incurred.”
Playtech is the latest gambling industry firm to reconsider its financing structure in the current macroeconomic climate.
Last week, US casino giant Caesars Entertainment closed a new $3bn credit facility designed to reduce its interest expenses on loaned cash.
Higher borrowing costs continue to have an impact on the iGaming sector as Russia’s war in Ukraine has led to a global increase in the cost of energy, among several other factors.