Betsson AB Secures €90 Million through Issue of New Senior Unsecured Bonds
Gambling Giant Betsson Nabs €90M in New Bonds
Swipes cash thanks to large investor backing
Betsson AB, the Swedish-based gambling powerhouse, has mile-deep pockets after landing €90 million ($94.23 million) via fresh senior unsecured bonds. This juicy sum is part of a broader framework stretching up to €250 million ($261.75 million), sporting a three-year tenor and a floating interest rate pegged to EURIBOR plus 650 bps, hitting the final maturity date in June 2025.
Martin Öhman, the financial whiz at Betsson, Quick to remark that the innovative notes sparked a major stir among investors, particularly Nordic and international heavyweights. He extoled the new funding as a boon that underscores investor faith in Betsson's growth strategy.
Prior to the new bond issue, Betsson extended a tender offer to holders of outstanding senior unsecured floating rate bonds worth SEK1 billion (€93.34 million/$98.06 million) with a maturity date in September 26, 2022. The offer went live on June 8, 2022, and the bondholders had until June 15, 2022, to tender their securities. Betsson revealed that SEK700 million (€65.34 million/$68.64 million) of bonds have been tendered and accepted for settlement, and the gambling group plans to pay 100.5% of the bond's nominal value and all accrued interest during the settlement on June 23, 2022.
Nordea bank served as the dealer manager and sole book runner in the new bond issue and the tender offer, while Swedish law agency, Gernandt & Danielsson, held the reins as Betsson's legal counsel.
When the news broke on June 22, Betsson's stock ticked down 3.5% to SEK60.75 ($5.96) but hoisted itself back to SEK61.25 ($6.01) the following day, only to trade in a narrow range of SEK62.30 ($6.11) to SEK60.85 ($5.97) on Friday.
The company acknowledged notable growth in its sportsbook operations in Q1 2022, contributing to an 8% swell in the group's revenue. Active customers jumped by 33%, but operational expenses took a bite out of profits, with EBITDA, operating income, net income, and operating cash flow slumping by 7%, 13%, 12%, and 17%, respectively.
Despite the Q1 2022 sliding profits, Betsson's financial status remains robust, bolstered by stellar revenue growth, fat profit margins, and a tidy net cash position. Analysts caution that any new financing activities, like the €90 million bond issue, would be feasible within the company's robust financial standing. The firm enjoys an enviable amount of liquidity and financial flexibility for expansion or distributing cash to shareholders.
- The new bonds, worth €90 million, were secured by Betsson AB, and they will have a floating interest rate tied to EURIBOR plus 650 bps, with the aim of raising up to €250 million in total.
- The financial head of Betsson, Martin Öhman, stated that the new senior unsecured bonds, particularly attractive to Nordic and international investors, are a testament to their faith in Betsson's growth strategy.
- Despite a slight dip in the company's stock following the announcement of the bond issue, analysts emphasize that such financing activities remain feasible within Betsson's strong financial standing, given their impressive revenue growth, high profit margins, and solid net cash position.
