GTECH says 14 banks back IGT acquisition with $10.7 bln loan

MILAN Wed Aug 20, 2014 2:00pm EDT

MILAN Aug 20 (Reuters) - Italian lottery operator GTECH said on Wednesday 14 banks have agreed to lend it up to $10.7 billion, in part to back its planned acquisition of U.S. slot machine maker International Game Technology.

The financing will be via a senior bridge loan and will be available to GTECH for 15 months, after which the company is expected to issue bonds to refinance it.

GTECH said in a statement that 45 percent of the loan would be denominated in euros and the rest in U.S. dollars.

Part of the loan will be used to finance the acquisition of the U.S. company, and part to refinance GTECH's existing debt.

GTECH will pay $4.7 billion in cash and shares for Las Vegas-based IGT and will also take on $1.7 billion of the U.S. firm's net debt. The total $6.4 billion deal value is above GTECH's own market capitalisation of $4.1 billion.

Credit Suisse, Barclays and Citigroup have arranged a syndicate of 11 banks to jointly finance GTECH. Other lenders involved include BNP Paribas, Credit Agricole, Deutsche Bank, Intesa Sanpaolo, JPMorgan Chase, Mediobanca and UniCredit.

In a move that makes it more expensive for GTECH to raise debt on the market, Standard & Poor's cut its rating on the company by one notch and Moody's put it on review for a downgrade following news of the IGT acquisition. (Reporting by Francesca Landini; editing by David Clarke)