Brightstar Buys Back €342m of 2.375% Notes and Refinances at 4.875% Out to 2032

Bondholders tendered 68% of the lottery group's 2028 notes and Brightstar will pay for them with a new €500 million issue priced last week at more than double the coupon. The €1.4 billion Italy Lotto instalment is why the balance sheet needed the room.

• Brightstar Lottery says €342,207,000 of its €500 million 2.375% senior secured notes due 2028 were validly tendered by the 4pm London deadline on 15 September, and it intends to accept all of them, leaving €157,793,000 outstanding
• The purchase price and accrued interest will be funded from the €500 million 4.875% senior secured notes due 2032 priced on 9 September at 99.360, with the balance repaying revolving credit facility drawings and fees, according to the company's announcements
• Settlement is expected on 18 September, subject to customary closing conditions
• Net debt stood at $3.8 billion at the end of June, up from $2.7 billion at the end of 2025, at 3.24 times leverage, after the final payment for the nine-year Italy Lotto concession, according to the second-quarter results
• The company rebranded from IGT as a lottery pure-play after selling its gaming and digital businesses to Apollo, and has launched digital lottery operations in São Paulo

Two Thirds of the 2028 Notes Come In, at a Price

Brightstar Lottery PLC announced on Wednesday the results of its tender offer for the Regulation S interests in its €500,000,000 2.375% senior secured notes due 2028. As of the deadline of 4pm London time on 15 September, €342,207,000 in aggregate principal amount had been validly tendered and not withdrawn, the company said, and subject to the conditions in the tender offer memorandum it intends to accept all of it for purchase. The outstanding principal after the settlement date, expected to be 18 September, will be €157,793,000.

The purchase price and accrued interest are to be funded with part of the proceeds of the €500,000,000 4.875% senior secured notes due 2032 whose pricing Brightstar announced on 9 September. Those notes were priced at 99.360 and are guaranteed on a senior basis by certain wholly owned subsidiaries, the company said, with the proceeds earmarked for the tender, for repaying utilisations under the senior revolving credit facilities, and for fees and expenses. Settlement of the new notes is itself subject to customary market and closing conditions.

The exchange is straightforward in effect: roughly two thirds of a 2028 maturity moves out to 2032, and the coupon on that money rises from 2.375% to 4.875%. On our arithmetic, the 2.5 percentage point difference on the €342 million tendered is about €8.6 million a year in additional interest, before the cost of the extra €158 million of new money, which at 4.875% is a further €7.7 million or so. Lottery Daily, which reported the transaction, put the new rate at 4.8% against 2.3% on the existing bonds.

Why the Balance Sheet Needed the Room

Brightstar's second-quarter results, published in August, showed net debt of $3.8 billion at the end of June against $2.7 billion at 31 December 2025, and net debt leverage of 3.24 times. The increase reflects the final payment for the new Italy Lotto concession, the company said; Lottery Daily puts that instalment at €1.4 billion, paid in April, for a nine-year licence the group fought to retain. Revenue in the quarter was $584 million, income from continuing operations was $56 million against a $60 million loss a year earlier, and adjusted EBITDA rose 4% to $286 million. Lottery Daily reports the company has maintained full-year guidance of $2.50 billion to $2.55 billion of revenue and $1.16 billion to $1.19 billion of adjusted EBITDA.

The wider shape of the company is recent. Brightstar is what remained of IGT after the sale of its gaming and digital operations to Apollo funds and the subsequent rebrand; Lottery Daily says that of roughly $4 billion of net proceeds, $2 billion went to debt reduction and $1 billion was returned to shareholders. The group has since launched digital lottery operations in São Paulo under a 15-year concession, with retail to follow later this year, and chief executive Vince Sadusky has said the company will keep investing in technology to compete for large concessions, particularly in North America, while refusing to cut price to win discounted contracts, according to the same report.

Paying Up for Time Is the Rational Trade When the Concession Is the Asset

A lottery group is a collection of long concessions, and its debt has to be shaped to match them. The Italy Lotto licence runs for nine years; a 2028 maturity sat two years into it, and refinancing at 2.375% was never going to be available again in the current rate environment. Moving €342 million out to 2032 at 4.875% costs real money, on the order of €16 million a year all in, but it aligns the repayment profile with the cash the concession will throw off and removes a 2028 refinancing cliff from a balance sheet that is already at 3.24 times. That is the trade a pure-play lottery company should make, and the fact that bondholders tendered 68% rather than all of it says some of them preferred to keep a cheap coupon to 2028 than swap into the new paper.

The Pure-Play Thesis Is Being Tested on Its Own Terms

Brightstar told investors that shedding gaming and digital would leave a simpler, cash-generative business that could carry concession-sized capital commitments. The last five months have been the test: a €1.4 billion licence payment, net debt up by $1.1 billion, and now a refinancing at more than twice the old rate. The Q2 numbers say the operating side is doing what was promised, with profit from continuing operations swinging to positive and guidance intact. The financing side says the price of being a lottery pure-play in 2026 is that every large concession is paid for up front and financed at today's rates, not 2020's. OpenBet's move into lottery supply this week rests on the same bet, that state lottery cash flows are worth paying for; Brightstar is the company finding out what that costs at scale.

Sadusky's Refusal to Discount Is the Line to Watch

A chief executive who says he will not cut price to win contracts is telling the market two things: that his margins are a choice, and that he expects to lose some tenders. With interest costs stepping up and North American concessions the stated target, the question for the next year is whether Brightstar can win on technology at full price often enough to keep leverage moving down. If it can, the 4.875% notes will look like the cost of a sound structure. If it cannot, the balance sheet has less room than it had in April, and the next refinancing will be the one that tells.

Brightstar has bought four more years on two thirds of a maturity, and paid a fair price for them. Whether it needed to buy them says more about the Italian licence than about the bond market.