The deal will allow Flutter to reduce interest payments and gain more flexibility through increased liquidity.
UK.- Flutter Entertainment has reached a debt refinancing deal to reduce interest repayments and increase liquidity.
The UK gambling operator has almost doubled the size of a US dollar term loan B credit facility, increasing it by $1.5bn. It will use the proceeds of that to repay $1bn of senior unsecured notes that had a 7 per cent interest rate and will free up £250m of liquidity for “general corporate purposes”.
It’s also repriced the US dollar loan to 225 basis points above the London Interbank Offered Rate (LIBOR). At current LIBOR levels, this would mean a rate of around 2.5 per cent, which compares to the 3.72 per cent Flutter was paying.
Meanwhile, Flutter will also reprice its €500m Euro term loan B facility at the Euro Interbank Offered Rate (EURIBOR) plus 250 basis points. With the EURIBOR currently negative, this would mean a rate of around 2 per cent compared to a previous rate of 3.75 per cent.
Flutter had mentioned plans to refinance the loan in its last financial report since the board felt the interest rate didn’t reflect its credit situation. The new price means the average cost of Flutter’s debts will fall from 4.2 per cent to 2.5 per cent, reducing its annual interest costs by £50m.
Last week, Flutter announced a deal to sell its Oddschecker affiliate business to private equity group Bruin Capital for £155m. It also appointed Amy Howe as chief executive of US subsidiary, FanDuel.