Spain Lottery eyes 4.5 billion euro bond, or bridge loans: source
By Paul Day
MADRID (Reuters) - Spain's state-owned Loterias, or Lottery, may raise up to 4.5 billion euros ($5.9 billion) through a bond or by seeking bridge loans before eventually going to capital markets, a source at the economy ministry told Reuters on Tuesday.
Loterias y Apuestas del Estado, as the company is formally known, will move forward with the bond issue after it finalises a 1.5 billion euros syndicated loan for which it has received offers of 4.3 billion euros, the source said.
The source did not say what the funds would be used for, but said the idea was to give Loterias a credit rating and debt structure that would be helpful should the state decide to sell shares in the company.
Last year Loterias had planned to raise 6 billion euros in debt with the funds going to help Spain's government bail out the country's cash-strapped autonomous regions. But the plan was scrapped in December when the regions needed less emergency liquidity than was originally thought.
The source said that the current plan for Loterias was to give it a debt load of two times EBITDA (earnings before interest, taxes, depreciation and amortization) as had been recommended by external advisors two years ago when there was a plan for Loterias to launch shares on the stock market.
"All the external advisors argued that for the appropriate pricing of a company and for it to obtain a (debt) rating and have it objectively priced by the market, there was a case for debt of twice EBITDA," the source said.
He said there was no short-term plan, however, to revive the Initial Public Offering, or IPO, plan for Loterias, but that the idea was to give the company a compatible debt structure and maximum flexibility if the time should come.
Spain's Treasury is advising Loterias on its debt raising. Continued...