Flutter and Entain refinance loans to free up £250m cash kitty

Flutter Entertainment has completed a loan re-financing to reduce debt and provide the business with additional liquidity for corporate development purposes. The repricing and upsizing of the operator’s existing Term Loan B facility by £1.1bn is designed to enhance the financial flexibility of the group. The facility is split between a $3bn component and a €500m component with different up-front lenders fees for both segments. The agreement involves the imminent repayment of $1bn of 7% Senior Unsecured Notes on 21 July but, crucially, frees up £250m for general corporate purposes including M&A. Flutter said it received strong support for the transaction with a material number of new lenders supporting more than 25% of the order book. As a result of the transaction, Flutter estimates the weighted average cash cost of debt will fall from 4.2% as of 31 December 2020 to approximately 2.5%. Based on the operator’s debt position at the end of 2020, this will equate to annualised interest savings of approximately £50m. Flutter’s FTSE 100 rival, Entain, engineered a similar refinancing on 16 July. The operator announced the pricing and allocation of a $1.3bn First Lien Term Loan B scheduled to mature on 29 March 2027. The proceeds of the agreement will be used to refinance and repay the operator’s existing $774m loan, which is due to mature on 29 March 2024. The calculated shift will once again provide additional funds of $351m (£250m) to support corporate development and a potential acquisition drive. Entain said it received very strong demand from global credit investors. The borrowers of the new loan will be Entain’s wholly owned subsidiaries Entain Holdings (Gibraltar) Limited and GVC Finance LLC. The transaction is expected to close by the end of July.