Playtech officially announced that the company raised a total of €530 million in a bond sale. Leveraging its size, Playtech has secured funding at a relatively low rate. The company announced that it managed to price the issue at 3.75 percent.
The note which Playtech sold is due in 2023. The company highlighted in its official announcement that it expects the paper to be rated at BB by S&P and Ba2 by Moody’s.
Playtech’s bonds will be traded on Euronext Dublin and are expected to settle on October 12.
Cost of Capital Provides Competitive Advantage
Playtech’s size continues to play a role in the company’s position in the foreign exchange space. After acquiring a multitude of companies in the retail and institutional space, the firm is well positioned to take advantage of the changed conditions in the market.
The retail trading industry appears to be failing to fully grasp the changes to the business for now. That said, some companies are already looking to change course, something that seems to be a drastic shift for the operations of retail brokers.
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Well-capitalized firms have a stronger position and are currently competitive. That said, their size advantage can quickly dissipate if they fail to adapt.
Playtech to Finance Gaming Acquisition
Playtech is using the funds to meet obligations related to an acquisition the company made in the spring. In April this year, the bond issuer acquired Snaitech, an Italian betting and gaming firm.
Playtech paid for the €291 million and will fund the redemption of the outstanding high-yield bonds issued by the Italian company.
After the issue of the paper, and the related redemption of Snaitech’s high-yield bonds, Playtech’s material outstanding borrowings total €588 million. A total of €297 million in senior convertible bonds are due next year.
Playtech also has a €250 million revolving credit facility, which remains unused by the firm.