Allwyn strikes €1.6bn funding deal in UK National Lottery boost

Allwyn strikes €1.6bn funding deal in UK National Lottery boost
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Allwyn has secured funding from a syndicate of international banks as the company gears up to operate the UK National Lottery.

Lenders under the Senior Facilities Agreement will provide funding in an aggregate amount of €1.6bn equally split across €441m of amortising term loans due 2027, €441m of bullet term loans due 2028, a €300m revolving credit facility due 2027 and a £380m multipurpose facility available to be drawn as guarantees or term loans maturing in 2027.

Allwyn will use the funds to provide term financing for up-front costs ahead of the start of the UK’s fourth National Lottery licence in February 2024, and to fund its general corporate purposes including shareholder distributions and acquisitions.

Proceeds will also be spent on refinancing the firm’s existing indebtedness including its €623m syndicated loan, its €380m bank guarantee facility, and up to €300m of other indebtedness.

Kenneth Morton, Allwyn CFO, commented: “I am very pleased by the level of interest that the transaction received despite the challenging capital market environment – all our existing banks have increased their commitments and we are happy to welcome several new lenders into our banking group.

“This financing significantly extends our maturity profile, provides us with a flexible financing solution for the up-front costs of the UK National Lottery licence and generates additional liquidity to support our further growth and resilience.”

The liabilities under the Senior Facilities Agreement will rank side-by-side with Allwyn’s existing debt under the existing intercreditor agreement.

UniCredit acted as Global Coordinator of the deal, Clifford Chance as Allwyn’s legal advisor and Allen & Overy as lenders’ counsel.

Morton added: “Following our successful issuance of €600m of bonds earlier in the year, this transaction is a further testament to the strength of the Allwyn credit – as demonstrated by our continued strong financial performance – and our consistent delivery on our organic and inorganic growth strategies.”

Allwyn does not assume control of the UK National Lottery’s operations until February 2024, but its transition plan is already well underway.

In September, Sharon Doherty and Victoria McKenzie-Gould were appointed as non-executive Directors and, in the same month, Allwyn opened a new office in Watford, close to the Head Office of current incumbents Camelot.

That preceded reports last month that Allwyn was in advanced talks to acquire Camelot’s UK operations for a fee in the region of £100m.

The two companies subsequently confirmed that discussions were ongoing over a deal with Ontario Teachers’ Pension Plan (OTPP), Camelot’s owner.