Flutter Entertainment Completes Debt Refinancing Transaction to Save €58M Annually
Flutter Entertainment (LON: FLTR), which is the parent company of Paddy Power Betfair, has gone through a debt refinancing transaction, which will see it save around €58 million (£50 million) every single year. Those savings will be active in the shape of interest, the company announced on Monday.
The transaction is actually in place so as to reduce the effective cost of debt and introduce additional liquidity to it. Through it, a further key component includes the repricing and upsizing of the group’s existing Term Loan B facility. This stands at around $1.5 billion (€1.3 billion). At the same time, the deal includes an almost instant repayment of $1 billion of 7% senior unsecured notes. That must occur on July 21. A net increase in the available liquidity of around £250 million for general corporate purposes is also included.
As a result of the transaction, the pricing is equal to 125 bps below the current margins across both the US dollar and Euro components. Speaking on the transaction, the Flutter Entertainment group said that it had received strong support for it thanks to a number of new lenders supporting more than 25% of the order book.
In a note to its investors, Flutter said that the group’s “weighted average cash cost of debt will fall from 4.2 percent (on December 31) to approximately 2.5 percent”. It then went on to state that if it bases the group’s debt position on the end of 2020, this figure “will equate to yearly interest savings of approximately £50 million per annum”.
Flutter also sold its Oddschecker Global Media to Bruin Capital last week for a total of £155 million. Through that transaction, Flutter will receive a total of £135 million in cash once the deal is complete. Following on from that, there is a further deferred contingent consideration, which is anything up to £20 million. Bruin Capital bases itself out of New York and operates as an investment company specializing in working with capital partners and management teams. It does this in order to build global sports, media, entertainment, and more.