Allwyn has closed a €600m senior secured bond offering, upsized from €500m, as part of its ongoing debt refinancing strategy and as it continues to pursue various projects across multiple markets.
The notes, issued by Allwyn Entertainment Financing (UK), carry a 4.125% coupon, mature in 2031 and were priced at 100%. The development will likely give Allwyn’s leadership a confidence boost, and perhaps more importantly give its shareholders a confidence boost too.
The move shows that the multinational lottery group is staying on top of its finances while expanding internationally, extending its reach into sports betting and undertaking ambitious projects like a revamp of the UK National Lottery.
Proceeds will be used to redeem €500m of 3.875% notes due 2027, $70m of 7.875% notes due 2029 (with $630m remaining), and €66.5m of 7.250% notes due 2030 (with €598.5m remaining). The funds will also cover accrued interest, fees and other costs.
Kenneth Morton, Allwyn CFO, said: “This transaction represents another important step in our proactive management of our balance sheet, further extending our maturity profile and optimising our capital structure.”
Morton added that the refinancing is “further testament to the strength of the Allwyn credit and our diversified access to capital markets, our continued strong financial performance and our consistent delivery on both organic and inorganic growth initiatives.”
Why it matters
The importance of this move is highlighted by the fact it helps Allwyn spread out its debt over a longer period of time, which could mean lower interest costs in the long run. Meanwhile, swapping out shorter-term or more expensive debt also reduces the pressure of refinancing soon.
With its balance sheet now in stronger shape, Allwyn can shift its focus towards enhancing the experience for UK National Lottery players, especially around how winnings are paid, as well as other initiatives like its purchase of shares in Greek betting firm Novibet, expected to conclude later this year.
In the UK, Allwyn is now in its second year of managing the UK National Lottery under a 10-year licence, and has been undertaking some major upgrades to the online and retail system throughout the country.
The firm announced last week that since introducing a new digital payment solution earlier this year, it has paid out more £15m to over 10,000 retail winners through what it calls a ‘quicker, more convenient’ online process that replaces cheques with direct bank transfers.
May was the busiest month to date according to its report, with 2,150 individual payments made to winners, which totalled £3,106,919. The payouts covered prizes won on EuroMillions, Lotto, Set For Life, HotPicks (Lotto and EuroMillions) and Scratchcards.
Allwyn’s Operations Director, Jenny Blogg, highlighted: “These 10,000-plus lucky winners have been getting their National Lottery winnings direct to their bank accounts in record time.
“Whether they’ve individually won £500.01, almost £50,000 or a prize amount in between, this has amounted to over £15m now paid out through the new payment technology in just a matter of months.”
The new system has also brought major efficiencies. Allwyn asserted that by removing the need to manually issue and post thousands of cheques, it is reducing admin and postage costs, meaning more funds can go to National Lottery-funded Good Causes.
Further ‘critical’ upgrades
Over the weekend, Allwyn temporarily shut down the UK National Lottery for two nights to carry out important technology upgrades across both retail and online platforms. The company asserts that these enhancements will improve the overall player experience.
Allwyn’s Director of Operations, Jenny Blogg, explained last month: “These critical tech upgrades follow on from our continuous progress in modernising The National Lottery, which hasn’t had a major refresh since 2009.”
These system upgrades are a condition of the company’s aforementioned 10-year licence, awarded by the UK Gambling Commission (UKGC) back in 2022 and which the firm commenced in February 2024.
It does continue to face some hurdles, however, with the UKGC seemingly not happy with the timeliness of the upgrades, although some legal challenges against Allwyn’s licence contest victory have likely got in the way of some of the firm’s progress in this regard.
The UKGC has now confirmed an enforcement action is underway against Allwyn.