888 refinances £400m of debt to bolster VCP plan

The board of 888 Holdings has secured terms to refinance £400m of senior secured debt notes held by the LSE gambling group.

Updating markets, 888 announced that bondholders will allow the wholly owned subsidiary 888 Acquisitions Limited to offer a £400m debt notes issuance to the GBP capital markets.

The transaction is expected to proceed on Thursday 9 May with senior debt notes offered at 10.75% due in 2030.

Further financial developments saw 888 enter an agreement to secure an additional revolving credit facility of £50m. Terms of the credit facility will mature from 31 December 2025.

Proceeds from the issuance will be used to repay or cancel existing Euro-denominated debt attached to senior facilities agreed on 29 June 2022.

888 expects its refinancing of senior notes to reduce net debt by approximately £18m. Investors were informed that “cash interest costs to increase by circa £4m to £5m on an annualised basis until 2028.”

Significant new debt structure agreements will extend certain maturities, improve the fixed vs floating interest rate mix, and better align the currency mix of the debt with the company’s cash generation.

As of Q1 2024 trading, 888 net debt stands at £1.7bn, reflecting a 5.6x debt/EBITDA ratio.

Operating under its new ‘Value Creation Plan’ (VCP), 888 will implement a new disciplined capital allocation to reduce its corporate net debt of £1.7bn to a leverage of below 3.5x by the end of 2026