UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. | Entry into a Material Definitive Agreement. |
Amended and Restated Credit Agreement
On October 8, 2020, Scientific Games Corporation (the “Company”) entered into Amendment No. 7 to that certain Credit Agreement, dated as of October 18, 2013 (as amended, supplemented, amended and restated or otherwise modified from time to time, including without limitation, by that certain Amendment No. 1, dated as of October 1, 2014, Amendment No. 2, dated as of February 14, 2017, Amendment No. 3, dated as of August 14, 2017, Amendment No. 4, dated as of February 14, 2018, Amendment No. 5, dated as of November 20, 2019, and Amendment No. 6, dated as of May 8, 2020, the “Credit Agreement”), by and among the Company, Scientific Games International, Inc., a wholly owned subsidiary of the Company (“SGI”) the several banks and other financial institutions or entities from time to time party thereto and Bank of America, N.A., as administrative agent, collateral agent, issuing lender and swingline lender (such amendment, “Amendment No. 7”).
The requisite lenders under the Company’s revolving credit facility have previously amended, among other things, the consolidated net first lien leverage ratio covenant in the Credit Agreement to (a) implement a financial covenant relief period through the end of the first quarter ending March 31, 2021 (the “Covenant Relief Period”), as a result of which SGI is not required to maintain compliance with the otherwise applicable consolidated net first lien leverage ratio covenant during the Covenant Relief Period, (b) reset the consolidated net first lien leverage ratio covenant following the Covenant Relief Period, (c) impose a minimum liquidity requirement (excluding SciPlay Corporation, a subsidiary and business segment of the Company (“SciPlay”)) of at least $275 million during the Covenant Relief Period, (d) further restrict the Company’s ability to incur indebtedness and liens, make restricted payments and investments and prepay junior indebtedness during the Covenant Relief Period, subject to certain exceptions and further subject, in some instances, to maintaining minimum liquidity (excluding SciPlay) of at least $400 million and (e) establish a LIBOR floor of 0.500% on borrowings under the revolving credit facility during the Covenant Relief Period.
Amendment No. 7 further extends the Covenant Relief Period for an additional three quarters. The revised consolidated net first lien leverage ratio will be 6.00x Consolidated EBITDA beginning with the fiscal quarter ending March 31, 2022, stepping down as follows: (1) 5.75x beginning with the third quarter of 2022, (2) 5.25x beginning with the first quarter of 2023, (3) 4.75x beginning with the third quarter of 2023 and (4) 4.50x beginning with the first quarter of 2024 and thereafter. The revised consolidated net first lien leverage ratio is based on Consolidated EBITDA (as defined in Amendment No. 7) as follows: (1) for the testing period ending March 31, 2022, Consolidated EBITDA for the fiscal quarter ending March 31, 2022 multiplied by 4, (2) for the testing period ending June 30, 2022, Consolidated EBITDA for the fiscal quarters ending March 31, 2022 and June 30, 2022 multiplied by 2, (3) for the testing period ending September 30, 2022, Consolidated EBITDA for the fiscal quarters ending March 31, 2022, June 30, 2022 and September 30, 2022 multiplied by 4/3 and (4) for all subsequent testing periods, Consolidated EBITDA for the previous twelve months including the quarter for the which the test is performed.
The foregoing description of the Credit Agreement, as amended by Amendment No. 7, does not purport to be complete and is qualified in its entirety by the full text of Amendment No. 7, a copy of which is attached hereto as Exhibit 10.1, which is incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SCIENTIFIC GAMES CORPORATION | |||
Date: October 8, 2020 | By: | /s/ Michael C. Eklund | |
Name: | Michael C. Eklund | ||
Title: | Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary |