AGS Achieves Strategic Financial Milestone with Term Loan Repricing
PlayAGS, a renowned name in the gaming industry, has made significant strides in optimizing its financial structure through the successful repricing of its term loan credit facility.
Strategic Financial Optimization at PlayAGS
This financial maneuver not only eliminates the credit spread adjustment related to term loan borrowings but also secures a more favorable interest rate of the Secured Overnight Financing Rate (“SOFR”) plus 3.75%. In a strategic move to bolster its financial health, AGS also took the initiative to repay $15 million of its total debt outstanding.
Kimo Akiona, the Chief Financial Officer of AGS, articulated the company’s steadfast commitment to improving its financial standing. He stated, “As an organization, we remain singularly focused on reducing net leverage through a combination of consistent Adjusted EBITDA growth and improving free cash flow conversion. To that end, today’s announced transactions should help to expedite the achievement of our near and intermediate-term deleveraging objectives.”
Anticipated Impact of Financial Restructuring
This financial restructuring is expected to generate substantial annualized cash interest expense savings for AGS, estimated to exceed $3 million based on current SOFR rates.
Such savings are pivotal for AGS as they navigate the competitive landscape of the gaming industry, aiming for sustainable growth and enhanced shareholder value.
Our Comment on the Article
AGS’s recent financial restructuring through the repricing of its term loan credit facility is a testament to the company’s proactive approach to financial management. By securing a reduced interest rate and committing to a substantial debt repayment, AGS not only underscores its dedication to fiscal responsibility but also sets a robust foundation for future growth.
The anticipated annualized savings in cash interest expenses highlight AGS’s strategic efforts to improve its free cash flow and reduce net leverage, aligning with its long-term financial objectives. This move not only strengthens AGS’s balance sheet but also reinforces its position in the highly competitive gaming sector, paving the way for continued innovation and market expansion.
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