Business Context and Reporting Period
This Form 6-K filing by International Game Technology PLC (IGT) covers the period of September 2018, specifically dated September 17, 2018. The filing announces a significant capital structure transaction involving the issuance of new senior secured notes and the planned redemption of existing debt obligations.
Key Financial Metrics and Capital Structure
- New Debt Issuance: IGT successfully upsized and priced $750,000,000 in 6.25% senior secured notes due 2027.
- Settlement Date: Expected on September 26, 2018.
- Debt Redemption Plan (Parent Company): Full redemption of $600,000,000 in 5.625% Senior Secured Notes due 2020 at a price of $1,028.43 per $1,000 principal.
- Debt Redemption Plan (Subsidiary):
- Full redemption of $144,303,000 in 7.50% Notes due 2019.
- Partial redemption of $96,832,000 of the $124,143,000 outstanding 5.50% Notes due 2020.
- Redemption Pricing (Subsidiary): Calculated as the present value of remaining payments discounted at the Treasury Rate plus 50 basis points (for 7.50% notes) or 35 basis points (for 5.50% notes).
Material Changes Versus Prior Period
The filing details a material change in the company's debt profile. IGT is replacing shorter-term, higher-cost debt (notes due 2019 and 2020) with longer-term debt (notes due 2027). The transaction is conditioned on the receipt of at least $500,000,000 in gross proceeds from the new offering.
Outlook, Management Commentary, and Risks
Management has confirmed the successful pricing of the new notes and the intent to utilize net proceeds alongside revolving credit facility utilization to execute the redemptions. The redemptions are scheduled for September 27, 2018 (Parent) and October 21, 2018 (Subsidiary). The filing notes that settlement is subject to customary market and closing conditions. No specific operational risks or unusual items regarding revenue or cash flow were disclosed in this specific filing, which focuses exclusively on the debt transaction.
Investor Verification Checklist
- Verify the final settlement of the $750,000,000 6.25% Notes on September 26, 2018.
- Confirm the execution of the full redemption of the 5.625% Notes due 2020 on September 27, 2018.
- Monitor the calculation of the redemption price for the subsidiary notes, which depends on the Treasury Rate at the time of redemption.
- Check subsequent filings for the impact of this refinancing on the company's overall leverage ratios and interest expense.