PlayAGS, Incorporated (AGS) completed a refinancing transaction that will lower the company’s outstanding debt by almost $40m. Refinancing also reduced its annualized cash interest expense by around $10m and expanded its revolving credit facility capacity to $40m.
"I am extremely pleased with the outcome of the company's recent debt refinancing, as it simultaneously lowers our total principal amount of debt outstanding, reduces our borrowing costs and extends key debt maturities," said AGS CFO, Kimo Akiona.
The transaction was done by issuing a senior secured first lien term loan in an aggregate principal amount of $575m, which is due by 2029. AGS used the proceeds together with cash on hand to repay its debt from the existing term loan, along with related fees and expenses for the new one.
The new term loan facility will bear interest at the secured overnight financing rate (SOFR) plus 4% and is subject to a 0.75% SOFR floor. The new revolving credit facility will bear interest at SOFR plus 4% and is subject to a 0% SOFR floor.
Akiona said he’s hopeful this financial move will benefit the company in the long run.
"Additionally, the increase in our revolver capacity from $30m to $40m strengthens our overall financial flexibility. Looking ahead, supported by the approximately $10m of annualized cash interest expense savings we expect to realize, relative to the level incurred for the full-year 2021, coupled with the operating momentum we continue to see in the business, I remain confident in our ability to deliver upon our previously issued year-end 2022 net leverage target of less than 4x,” he said.
