Tabcorp prices US$289m notes on private US market

Proceeds from the notes will be used for general corporate purposes, debt repayment, and funding growth options.

Australia.- Tabcorp has announced the diversification of its funding sources through the successful pricing of a new AU$425m (US$289m) issue of long-term debt to investors in the US private placement market. The debt is divided into two tranches with a weighted average coupon of 7.75 per cent. Equivalent to AU$249m and AU$176m, the maturity dates of seven and 10 years respectively.

The notes are scheduled to settle in March 2023, subject to customary conditions.  In accordance with Tabcorp’s strategy since demerger, proceeds from the notes will be used for general corporate purposes, debt repayment, and growth options.   

Daniel Renshaw, Tabocorp’s Chief Financial Officer, said: “This successful debt raising is a positive endorsement of the strategy and execution of new Tabcorp post demerger by investors in the USPP market. 

“This is a testament to our focus on financial strength as we diversify funding sources and extend our debt maturity profile. It will provide us with the flexibility to pursue growth and further progress our transformation strategy.”

Tabcorp‘s first-quarter revenue was up 18.7 per cent when compared to last year. Gaming and media revenue grew 14.2 per cent year-on-year, with the digital share rising from 23.9 per cent to 24.7 per cent. Revenue in the same quarter last year had been impacted by Covid-19 restrictions.

Gaming services revenue rose 91.7 per cent in the first quarter, although Tabcorp said this was primarily due to the pandemic-related venue closures in the same period last year.