Scientific Games Bonds Drop After Agreement to Buy BallyChristine Idzelis
Scientific Games Corp.’s bonds dropped after the company controlled by billionaire Ronald Perelman agreed to purchase Bally Technologies Inc. for about $3.3 billion.
The slot machine supplier’s $300 million of 6.25 percent, senior subordinated notes due 2020 fell to 91 cents on the dollar today from 98.6 cents on July 29, to yield 8.2 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. That’s the biggest drop since January 2013.
Scientific, based in New York, agreed to purchase Las Vegas-based Bally in a deal valued at about $5.1 billion, including the refinancing of about $1.8 billion of Bally’s net debt, according to a statement today.
Bank of America Corp., JPMorgan Chase & Co. and Deutsche Bank AG have committed financing for the deal, according to a presentation today. The combined company’s total debt will be 6.3 times earnings before interest, taxes, depreciation and amortization, the document shows.