(Adds Moody's statement)
MILAN, July 17 Standard & Poor's has cut its
rating for Italy's lottery operator GTECH and Moody's
put it on review for a downgrade after the company said it was
buying U.S. slot machine maker International Game Technology
for $4.7 billion.
GTECH said on Thursday S&Ps had cut its rating on the
company to BBB- from BBB without elaborating.
In a later statement, rival agency Moody's said it was
reviewing the rating of both GTECH and IGT for a possible
Moody's said its decision was due to its assessment that the
new company's 5.0 times pro forma debt/EBITDA - excluding
synergies - "is a level that we would typically consider high
for a low investment grade rating."
"In addition, the exact capital structure that will be used
to finance the merger has not yet been determined," said Senior
Moody's Vice President Keith Foley.
"The possibility exists that any downgrade could be more
than one notch and cause GTECH and IGT to lose their investment
grade status, as well as prevent (the) NewCo from obtaining
investment grade status," added Foley.
GTECH announced the deal on Wednesday.
(Reporting by Silvia Aloisi, editing by William Hardy)