LeoVegas considers bond issue to finance expansion

The group has appointed two banks as joint bookrunners as it looks to raise finance.

Sweden.- LeoVegas Group has appointed Skandinaviska Enskilda Banken (SEB) and Swedbank as joint bookrunners as it considers issuing a senior unsecured bond to fund future merger and acquisitions.

The expected volume of the bond would be SEK500m (€49.2m) with maturity after three years. Depending on market conditions, it could be followed by a capital market transaction.

The operator has also entered a €40m revolving credit facility.

LeoVegas chief executive Gustaf Hagman said: “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.

“This enables us to continue to deliver on our expansion strategy where we focus on regulated markets and markets soon to become regulated,” he explained. 

“Further, we continuously evaluate strategic and complementary acquisitions that may fit into the LeoVegas Group.”

The operator aims to retain a leverage ratio of net debt to adjusted EBITDA of 1.0x, though said it may exceed this level in the short term to pursue larger acquisitions. 

It aims to go on outperforming the wider gaming market and returning at least 50 per cent of profit after tax as dividends to shareholders.

The company saw a slight 0.8 per cent increase in revenue for the third quarter, up to €88.9m, with growth having been stalled due to Sweden’s temporary deposit limits on online casinos, which were introduced due to the Covid-19 pandemic and may be maintained into 2021.

However, recent figures show that igaming revenue has increased in Sweden despite the introduction of the deposit limits.