Economic, Business & Finance :: Market news

Rlpc italys gtech backs igt buy with $107 bln bridge loan

´╗┐Italian-regulated gaming company GTECH is backing its $4.7 billion cash and stock acquisition of U.S. based International Game Technology (IGT) with a $10.7 billion bridge loan. The deal is the second-biggest acquisition financing in Europe, the Middle East and Africa this year after a $14.2 billion loan for Bayer which financed its acquisition of US-based Merck's consumer care business. GTECH's financing, which will also be used to refinance existing debt, is initially being provided by Credit Suisse, Barclays and Citigroup. The loan will finance the $3.7 billion cash consideration of the acquisition, $1.3 billion will be used to backstop an IGT bond, 2.5 billion euros ($3.38 billion) will backstop a GTECH bond and $600 million will be used to backstop drawn loans.

The fees on the bridge loan are 1.5 percent. The bridge loan is expected to be repaid mainly by issuing euro and dollar-denominated bonds, depending on the company's rating post acquisition.

GTECH expects to have leverage of 4.5 to 4.9 times net debt to Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) at closing. Synergies are expected to cut leverage by around 0.5 times. Credit Suisse is lead financial advisor to GTECH and left lead arranger and bookrunner on the financing.

Barclays and Citigroup are also financial advisors and acting as joint-lead arrangers, joint bookrunners and co-syndication agents on the financing. The acquisition is expected to close in the first half of 2015. Under the merger, IGT and GTECH will combine under a newly formed UK holding company which will have its corporate headquarters in the United Kingdom and operating headquarters in Las Vegas, Providence and Rome. The combined entity will have more than $6 billion of pro-forma revenues and more than $2 billion of pro-forma EBITDA. ($1 = 0.7394 Euros)

Rlpc russias otkritie seeks one year loan extension

´╗┐Oct 22 Russian private bank Nomos Bank, now named Otkritie Financial Corporation Bank, is looking for a one-year extension for a $240 million one-year loan signed in November 2013, banking sources said on Wednesday. The 2013 loan paid 175 basis points (bps) over Libor and includes the option to be extended for a further year."Nomos is looking for an extension but in a different market it would look for a new loan for a number of years. It is a good name and I think a deal will probably get done," said one banker who is working on the loan.

However, a second banker looking at the deal said it is likely to be smaller than the original $240 million loan, as Western banks have pulled away from lending to Russian borrowers in the wake of US and EU sanctions."I am not sure it will get the full size it is looking for, a number of the lenders on the original deal will be flushed out including the opportunistic retail banks. It will be a small clubby relationship deal," he said.

Commerzbank acted as coordinator on the 2013 deal and was a mandated lead arranger and bookrunner alongside Bank of America Merrill Lynch, Citigroup, JP Morgan, Raiffeisen Bank International, Rosbank and UniCredit Group. Credit Europe Bank and Goldman Sachs were lead arrangers, while Banca Intesa, Landesbank Baden-Wurttemberg, PPF banka, VTB Bank, Oberbank and Bank of Ireland joined as arrangers.

Another privately-owned Russian bank Promsvyazbank is close to completing a new syndicated loan to refinance a $300 million deal that signed in September 2013. A small club of European relationship banks are working on the deal, which could close before the end of November, the bankers said. Otkritie and Promsvyazbank were not immediately available to comment.