Pricing of Senior Secured Fixed Rate Notes and Senior Secured Floating Rate Notes Offering
888 (LSE: 888), one of the world's leading online betting and gaming companies announced that its wholly owned subsidiary, 888 Acquisitions Limited (the "Issuer”) priced an offering of €400 million in aggregate principal amount of 7.558% senior secured notes due 2027 (the "Fixed Rate Notes") and €300 million in aggregate principal amount of floating rate senior secured notes due 2028 (the "Floating Rate Notes" and, together with the Fixed Rate Notes, the "Notes") on 8 July 2022. The issuance of the Notes is part of a wider financing plan in which the Issuer and 888 Acquisitions LLC (only with respect to Facility B (USD)) are expected to enter into (i) a £416 million (equivalent) term loan B facility, ("Facility B (USD)"), (ii) a £400 million (equivalent) euro-denominated term loan A facility ("Facility A (EUR)") and (iii) a £352 million GBP-denominated term loan A facility ("Facility A (GBP)"), each maturing in 2028. Facility A (EUR) and Facility A (GBP) are expected to be initially held and funded by one or more of the underwriters. The Issuer is also expected to enter into a £150 million multicurrency revolving credit facility, which is expected to be undrawn on the Issue Date, maturing in 2028 (the "Revolving Facility" and, together with Facility A (EUR), Facility A (GBP) and Facility B (USD), the "Senior Facilities"). Amounts have been converted at an exchange rate of $1.2022 per £1.00 or €1.1829 per £1.00, as applicable, which represent the Bloomberg Generic Composite Rate as of July 7, 2022.
The mandated lead arrangers will be funding a significant portion of the original issue discount on the Issue Date across Facility A (EUR), Facility B (USD) and the Floating Rate Notes. When including amortization of only the original issuance discount amounts that are not being funded by the mandated lead arrangers, as well as other capitalized issuance costs over the life of such debt, the Company’s weighted average cost of debt is currently expected to be approximately 7.36%, based on the latest spot rates and for the twelve months ended 28 February 2022, adjusted to give effect to the transactions as if the transactions had occurred on 1 March 2021. This rate is subject to changes and is not a prediction of the expected future weighted average cost of debt as benchmark rates may change in the future.
The offering of the Notes (the "Offering") will be an offering exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The Notes are expected to be issued on 19 July 2022 (the "Issue Date"), subject to customary closing conditions.
The Company expects to use the gross proceeds of the Offering, together with borrowings under the Senior Facilities and existing cash reserves to (i) repay and cancel in full amounts outstanding under certain acquisition financing arrangements entered into to purchase the international (non-US) business of William Hill ("WH Business"), which was acquired by the Group on 1 July 2022, (ii) repay certain existing indebtedness of the WH Business, to the extent it is outstanding on the Issue Date, and (iii) pay fees and expenses related thereto.
A copy of this announcement will shortly be available at https://corporate.888.com.
