Lottomatica prices €400M PIK toggle notes at 8.125%; terms

Lottomatica SpA has priced its €400 million offering of five-year (non-call two) senior secured pay-if-you-can payment-in-kind toggle notes at 8.125%. Final terms compare with price talk given yesterday in the 8.25% area and initial price thoughts previously of low 8%.

Barclays (B&D) and Goldman Sachs were joint global coordinators and physical bookrunners. Credit Suisse, Deutsche Bank, J.P. Morgan, Morgan Stanley and UniCredit were joint bookrunners, while Apollo was 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 worth €375 million. 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.

Issue ratings are CCC+/Caa1. S&P Global Ratings affirmed corporate ratings at B, but Moody's has downgraded the company rating to B2, citing the "unexpected and aggressive nature of the dividend recapitalization transaction."

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

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