Lottomatica plots €400M secured PIK toggle note to fund shareholder payout

Lottomatica SpA will hold an investor call today at 2:30 p.m. London time to discuss plans for a €400 million, five-year (non-call two-year) senior secured pay-if-you-can payment-in-kind, or PIK, toggle note. Ahead of the call, initial pricing thoughts are out at low 8%.

Barclays (B&D) and Goldman Sachs are joint global coordinators and physical bookrunners. Credit Suisse, Deutsche Bank, J.P. Morgan, Morgan Stanley and UniCredit are joint bookrunners, while Apollo is a co-manager.

The notes will be issued at holding company level via Gamma Bondco SARL and proceeds are earmarked to fund a dividend to shareholders. Lottomatica is backed by private equity group Apollo, which acquired the company earlier this year via its portfolio company Gamenet.

Gamenet's acquisition of Lottomatica was funded by the sale in March of €575 million of 5.125% notes due 2025, which were issued via Gamma Bidco. Those bonds closed yesterday at 100.75, to yield 4.823%, according to S&P Global Market Intelligence data.

Banks are pointing investors toward issue ratings of CCC+ and Caa1 at S&P Global Ratings and Moody's, and corporate ratings of B/B2. Both ratings outlooks are expected to be stable, banks add.

Lottomatica is an Italian online sports betting and gaming machines provider. The company was acquired for €950 million by Gamenet Group earlier this year.