Australian wagering giant Tabcorp is raising A$427 million and turning to the private placement market in the US to do so. The racing and betting company is issuing long-term debt to be accrued in two USD tranches of Notes with a 7.75% weighted average coupon.
The first tranche will mature in 7 years and the wagering firm will have to return A$249 million. The second one is maturing in 10 years and Tabcorp will have to pay the remaining A$177 million to US investors.
US Investors Support Tabcorp’s Post-Demerger Plans
According to Tabcorp, the funds the company will collect will be used for the repayment of existing debt and general corporate plans, as well as to fuel the firm’s growth after the demerger.
Tabcorp CFO Daniel Renshaw said that the “successful debt raising” was “a positive endorsement” of Tabcorp’s post-demerger strategy, adding that US investors supported the execution of Tabcorp’s post-demerger plans.
Diversifying Funding Sources
Renshaw called the successful debt raising a testament to Tabcorp’s financial muscle. He was also happy that the company was using different sources to fund its operations and diversify capital, as well as extend its debt maturity profile.
For Renshaw, the issuing of long-term debt would provide Tabcorp with opportunities to grow and to continue with the transformation strategy after the demerger of The Lottery Corporation Limited (ASX: TLC) and Tabcorp Holdings Limited.