Snai to raise 500m in bonds sale
Italian operator to take advantage of low borrowing costs in order to raise funds to pay down debt
Italian land-based and online operator Snai is preparing for a sale of high-yield bonds in an effort to raise 500 million after the board of directors gave the go-ahead to the move.
The operator confirmed it is planning to sell a mixture of senior secured notes and senior subordinate notes maturing in June and December 2018 respectively, with the amassed funds to be used to refinance existing bank debt.
Snai’s latest interim report, which was released earlier this month, revealed the company’s net financial position was minus 373.8m as of 30 September 2013.
In addition, the Italian Court of Auditors has ordered the operator to pay a sum of 210m after being judged to have failed to comply with service levels relating to its slots network – although Snai has appealed the fine and proposed a settlement amount of 25% (52.5m).
Despite Snai’s financial position, a senior figure at another Italian-based operator questioned the timing of the bonds sale.
“They released the quarterly earnings report a few weeks ago which I think was better than expected and better than last year’s numbers, so the timing is curious,” he told eGaming Review.
Snai said it will announce the final terms and conditions of the notes and pricing once the book-building process has been completed.
According to Bloomberg, borrowers are currently benefiting from record low central bank rates, which are encouraging investors to take on more risk as default rates approach historic lows.