Swedish online casino and sports betting services provider LeoVegas AB announced today it had authorized exploration among investors regarding the issuance of senior unsecured bonds.
SEK500M Three-Year Tenor Notes
According to the information published pursuant to the EU Market Abuse Regulation 596/2014, SEB and Swedbank have been given instructions by LeoVegas to operate as joint book-runners and arrange meetings with investors commencing from November 30, 2020, as the Swedish gaming operator is looking to raise SEK500 million in senior unsecured notes, within a framework of SEK1.2 billion, with a three-year tenor.
“With this, we ensure a long-term and stable financing for LeoVegas. We strengthen the company’s financial flexibility and diversify our financing with the combination of a bond and new bank loans.”Gustaf Hagman, CEO, LeoVegas
The proceeds from the potential issuance of unsecured notes, which, subject to market conditions, may go through a capital markets transaction, LeoVegas is intending to use for its expansion strategy, to refinance existing debt, as well as for potential acquisitions.
“This enables us to continue to deliver on our expansion strategy where we focus on regulated markets and markets soon to become regulated. Further, we continuously evaluate strategic and complementary acquisitions that may fit into the LeoVegas Group.”Gustaf Hagman, CEO, LeoVegas
New Revolving Credit Facility
Simultaneously, LeoVegas announced it enters into a new revolving credit facility agreement to the amount of EUR40 million, running for 3 years. Absorbing new debt, the Swedish operator noted it set a firm debt target. LeoVegas intends to keep its leverage ratio, the net debt to adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the long-term below or equal to 1.0x.
While committing to a long-term ceiling on debt, the operator stated that under certain circumstances, the leverage ratio may exceed the specified level during short periods of time, and especially in connection with strategic initiatives or business acquisitions.
LeoVegas’s long-term financial goals remain unchanged, the operator noted in the official release, citing organic growth, EBITDA margin and dividend payments.
The group is seeking to achieve long-term organic growth which outperforms the online gaming market and to have a long-term EBITDA margin of at least 15%, assuming that all of its revenues are generated from locally regulated markets where gaming tax is paid. Last, LeoVegas is aiming to achieve a level of dividend payment of at least 50% of its profit after tax.