Item 1.01.
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Entry into a Material Definitive Agreement.
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Amended and Restated Credit Agreement
On October 8,
2020, Scientific Games Corporation (the “Company”) entered into Amendment No. 7 to that certain Credit Agreement,
dated as of October 18, 2013 (as amended, supplemented, amended and restated or otherwise modified from time to time,
including without limitation, by that certain Amendment No. 1, dated as of October 1, 2014, Amendment No. 2, dated as of
February 14, 2017, Amendment No. 3, dated as of August 14, 2017, Amendment No. 4, dated as of February 14, 2018, Amendment
No. 5, dated as of November 20, 2019, and Amendment No. 6, dated as of May 8, 2020, the “Credit Agreement”), by
and among the Company, Scientific Games International, Inc., a wholly owned subsidiary of the Company (“SGI”) the
several banks and other financial institutions or entities from time to time party thereto and Bank of America, N.A., as
administrative agent, collateral agent, issuing lender and swingline lender (such amendment, “Amendment No.
7”).
The requisite
lenders under the Company’s revolving credit facility have previously amended, among other things, the consolidated net
first lien leverage ratio covenant in the Credit Agreement to (a) implement a financial covenant relief period through the
end of the first quarter ending March 31, 2021 (the “Covenant Relief Period”), as a result of which SGI is not
required to maintain compliance with the otherwise applicable consolidated net first lien leverage ratio covenant during the
Covenant Relief Period, (b) reset the consolidated net first lien leverage ratio covenant following the Covenant Relief
Period, (c) impose a minimum liquidity requirement (excluding SciPlay Corporation, a subsidiary and business segment of the
Company (“SciPlay”)) of at least $275 million during the Covenant Relief Period, (d) further
restrict the Company’s ability to incur indebtedness and liens, make restricted payments and investments and prepay
junior indebtedness during the Covenant Relief Period, subject to certain exceptions and further subject, in some instances,
to maintaining minimum liquidity (excluding SciPlay) of at least $400 million and (e) establish a LIBOR floor of 0.500%
on borrowings under the revolving credit facility during the Covenant Relief Period.
Amendment No. 7 further
extends the Covenant Relief Period for an additional three quarters. The revised consolidated net first lien leverage ratio will
be 6.00x Consolidated EBITDA beginning with the fiscal quarter ending March 31, 2022, stepping down as follows: (1) 5.75x beginning
with the third quarter of 2022, (2) 5.25x beginning with the first quarter of 2023, (3) 4.75x beginning with the third quarter
of 2023 and (4) 4.50x beginning with the first quarter of 2024 and thereafter. The revised consolidated net first lien leverage
ratio is based on Consolidated EBITDA (as defined in Amendment No. 7) as follows: (1) for the testing period ending March 31, 2022,
Consolidated EBITDA for the fiscal quarter ending March 31, 2022 multiplied by 4, (2) for the testing period ending June 30, 2022,
Consolidated EBITDA for the fiscal quarters ending March 31, 2022 and June 30, 2022 multiplied by 2, (3) for the testing period
ending September 30, 2022, Consolidated EBITDA for the fiscal quarters ending March 31, 2022, June 30, 2022 and September 30, 2022
multiplied by 4/3 and (4) for all subsequent testing periods, Consolidated EBITDA for the previous twelve months including the
quarter for the which the test is performed.
The foregoing
description of the Credit Agreement, as amended by Amendment No. 7, does not purport to be complete and is qualified in its
entirety by the full text of Amendment No. 7, a copy of which is attached hereto as Exhibit 10.1, which is
incorporated herein by reference.