If you ever wondered whether being a publicly-listed company in this industry is worth it, consider the latest batch of senior secured notes sourced by Playtech. The company just announced this morning that it managed to source €350 million at a rate of 4.25% for its BB-rated paper.
According to the gaming and financial technology provider’s public announcement, the net proceeds of the issue of the new bonds will be used to redeem on maturity all of the outstanding €297 million senior convertible bonds which are due for November 2019.
Shares of the company rallied on the news as any prospect for dilution this autumn is being discounted out of the market. After closing around 422 pence yesterday, Playtech’s stock is currently trading 2.75 percent higher at 434 pence per share.
Playtech also maintains a €272 million revolving credit facility which is currently undrawn.
Cost of Capital Challenges
With interest rates slowly increasing globally, Playtech’s placement today highlights the advantages which have over other industry peers. The company’s solid capital base is underpinning the potential of its financials division at a time when the industry is getting squeezed by tighter regulations.
The news comes after the firm’s financial division TradeTech, reported that its trading . While a business slowdown hit the industry in the latter half of last year, companies who can afford to reach clients in an environment of higher user acquisition costs are also set to gain more revenues per client, at least that is what the latest trends in the industry are.
While as we already mentioned, interest rates are rising, the increase is nowhere near the pockets of savers across Europe. If EU regulators have to blame someone for the increasing risk appetite of retail investors across the continent, the focus should be on the ECB, which maintains rates at zero for a third straight year.
Be First to Comment