International Game Technology is preparing to borrow 500 million euros to refinance existing debt and fund operations, the company announced this week.
IGT, which is seeking to extend its contract to run Rhode Island's gambling technology systems, is offering the senior secured debt on Global Exchange Market of Euronext Dublin on Sept. 16, according to a news release. The interest rate will be 2.375%.
IGT intends to use the proceeds of the new bonds to pay down a revolving line of credit, and potentially pay early a 320-million euro payment due in January on another loan.
IGT Senior Vice President Robert Vincent said the interest rate on the new 8.5-year bond is the lowest the company has achieved for a similar borrowing. In June the company borrowed $750 million euros at 3.5%, he said.
"We are taking advantage of a very advantageous bond market and paying down term loans due in 2020 that have restrictive covenants and a 2020 maturity," Vincent wrote in an email. "We could have upsized the amount of the bond offering given investor demand but we don't need the cash."
He noted that the second quarter of this year was the "best quarter ever" for cash flow.
According to its second quarter earnings report, IGT has $7.6 billion in net debt.