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| Bill Pieri |
GTECH Corp. took advantage of the strong market to replace a $300 million facility with a new $500 million revolver that offers more favorable terms and additional flexibility for potential acquisitions. "Conditions are excellent, the best that we've seen in years and then we just felt we should take advantage of that," said Bill Pieri, treasurer of GTECH.
"Banks are very willing to lend money these days and that excess supply works in the favor of corporations that are able to get favorable terms and conditions. It's really quite that simple," he said. Pricing on the old revolver was tied to leverage, but is now tied to the company's BBB/Baa1 credit rating and that is also an improvement, he added.
GTECH, a subsidiary of GTECH Holdings Corp., provides transaction processing services to the lottery industry. The company recently approved a $100 million share repurchase program and also will invest in new online lottery bids and acquisitions. GTECH has approximately $50 million of total debt outstanding. The new revolver is unsecured and matures October 2009.
Bank of America and Calyon lead the facility. Bank of Nova Scotia, KeyBank, Wachovia Bank, Commerzbank, Citizens Bank, Fifth Third Bank and SunTrust Bank also participated. Pieri said the syndication process had been self-initiated. "We did the deal ourselves. It was basically a club deal, pre-syndicated by GTECH. There was no large selling effort on behalf of the arrangers and their role was more on the documentation and the negotiation side as opposed to the selling side," Pieri noted.
The number of lenders participating in the syndicate stayed unchanged, though two banks dropped out. "They still wanted to be in but we had a minimum hold level and they weren't comfortable with that." Pieri said. Fifth Third and SunTrust replaced the banks that stepped out, but he declined to name those banks. GTECH brought in Wachovia to fill the open spot created when previous lenders Fleet Bank and B of A merged.