Reduced Loan Interest by £10 Million: Entain Refinances Debt
Entain Strengthens Financial Position with Successful Refinancing
Entain, a leading name in the online gaming industry, has announced a significant update to its capital structure following successful refinancing initiatives. The changes aim to extend debt maturities and reduce interest expenses, with the goal of saving approximately £10 million annually on loan interest payments.
The refinancing involves an extension and repricing of Entain's USD Term Loans, with a principal outstanding amount of around $1,100 million (including $20 million for transaction fees and general corporate purposes) and an additional term loan principal of approximately $2,218 million as of late July 2025.
The key features of the refinancing include an extended maturity date for both loans, with the first loan's maturity extended by approximately five and a half years to July 2032, and the maturity date of the second loan remaining set for October 2029.
The refinancing has resulted in a reduction of the interest rate for both loans. The first loan now carries an interest rate of 225bps over Term SOFR, a decrease of 35 basis points. Similarly, the second loan's interest margin has been lowered by 50 basis points to 225bps over Term SOFR.
Despite the refinancing of both loans, Entain's total debt remains unchanged. The lower interest rates on both loans are expected to contribute to Entain saving approximately £10 million annually on loan interest payments. The lower interest rates are also expected to significantly strengthen Entain's financial position.
These refinancing moves are net debt neutral, meaning they do not increase the overall debt level but extend the debt maturity profile and reduce funding costs, enhancing Entain's capital structure.
The refinancing is part of Entain's broader strategy to optimize its capital structure amid a high-interest environment. Although Entain's share price dropped by 1% today to £10.07, it has been on a strong upward trend since June, when it was trading at £7.51.
The first loan was issued at a 99.875 discount, and the refinancing includes adjustments to two US dollar-denominated Term Loans. The refinancing of the first loan has been designed to reduce annual loan interest payments by approximately £10 million.
It's important to note that the refinancing changes do not impact Entain's current financial obligations, as the overall net debt remains unchanged. The refinancing includes a 25 basis points interest rate reduction if Entain’s leverage ratio is at or below 2x, based on the Senior Facilities Agreement dated March 2025.
In summary, Entain's refinancing has resulted in a capital structure that maintains current debt levels but improves liquidity by extending maturities and reduces costs via lower interest expenses, thereby strengthening the company’s financial flexibility.
The successful refinancing of Entain's loans has moved the company towards savings of approximately £10 million annually on loan interest payments, thus significantly strengthening the company's financial position in the business sector. With the lowered interest rates on two US dollar-denominated Term Loans, Entain's capital structure has been optimized amid a high-interest environment, enhancing the company's financial flexibility.
