nternational Game Technology (IGT) announced on Monday that it has entered into an Amendment and Extension agreement with respect to its term loan facility, which represents IGT’s first sustainability-linked transaction.
The CFO of IGT Max Chiara said: "We are pleased to announce a successful refinancing of our term loan facility agreement. This transaction is another step of a plan to enhance our credit profile, generate additional liquidity and extend debt maturities. It will extend the weighted average maturity of our debt instruments to approximately five years. Based on the current balances and interest rates of the company's debt, we expect this transaction and the debt transactions closed earlier this year to result in approximately $65 million in lower annualized interest expense going forward. We also added an environmental, social, and governance (ESG) margin adjustment, highlighting IGT's commitment to sustainability."
The Amendment and Extension agreement, among other things, increases the amount of the aggregate term loan facilities from €860 million (USD $1.013 billion) to €1 billion (USD $ 1.17 billion), extends the maturity date of the term loan facilities to January 25, 2027, reduces the applicable interest rate by 35 basis points based on current debt ratings, provides for a maximum decrease or increase of an additional 7.5 basis points in the margin based on ESG factors, requires €200 million (USD $235.74 million) in annual amortization payments in each of 2024, 2025 and 2026, with the remaining €400 million (USD $471.49 million) balance due at maturity, and maintains and extends existing financial covenant thresholds.
IGT's current report on Form 6-K with the full text of the Amendment and Extension was filed in the Securities and Exchange Commission on July 26, 2021.