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Long-Term Debt | 12 Months Ended
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Dec. 31, 2022
Debt Disclosure [Abstract] |
Long-Term and Other Debt | Outstanding Debt The following table reflects our outstanding debt:
| As of December 31,
| 2022 |  | 2021
| Final Maturity |  | Rate(s) |  | Face Value |  | Unamortized debt discount/premium and deferred financing costs, net |  | Book Value |  | Book Value
Senior Secured Credit Facilities: |  |  |  |  |  |  |  |  |  |  |
LNWI Term Loan B-5 | 2024 |  | variable |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,982 |
SciPlay Revolver | 2024 |  | variable |  | — |  |  | — |  |  | — |  |  | — |
LNWI Revolver | 2027 |  | variable |  | — |  |  | — |  |  | — |  |  | — |
LNWI Term Loan B | 2029 |  | variable |  | 2,189 |  |  | (30) |  |  | 2,159 |  |  | — |
LNWI Senior Notes: |  |  |  |  |  |  |  |  |  |  |
2025 Secured Notes | 2025 |  | 5.000% |  | — |  |  | — |  |  | — |  |  | 1,240 |
2026 Secured Euro Notes | 2026 |  | 3.375% |  | — |  |  | — |  |  | — |  |  | 364 |
2025 Unsecured Notes | 2025 |  | 8.625% |  | 550 |  |  | (5) |  |  | 545 |  |  | 544 |
2026 Unsecured Euro Notes | 2026 |  | 5.500% |  | — |  |  | — |  |  | — |  |  | 280 |
2026 Unsecured Notes | 2026 |  | 8.250% |  | — |  |  | — |  |  | — |  |  | 1,090 |
2028 Unsecured Notes | 2028 |  | 7.000% |  | 700 |  |  | (7) |  |  | 693 |  |  | 692 |
2029 Unsecured Notes | 2029 |  | 7.250% |  | 500 |  |  | (5) |  |  | 495 |  |  | 494 |
Other | 2023 |  | — |  | 2 |  |  | — |  |  | 2 |  |  | 4 |
Total long-term debt outstanding |  |  |  |  | $ | 3,941 |  |  | $ | (47) |  |  | $ | 3,894 |  |  | $ | 8,690 |
Less: current portion of long-term debt |  |  |  |  |  |  |  |  | (24) |  |  | (44) |
Long-term debt, excluding current portion |  |  |  |  |  |  |  |  | $ | 3,870 |  |  | $ | 8,646 |
Fair value of debt(1) |  |  |  |  | $ | 3,867 |  |  |  |  |  |  |
(1) Fair value of our fixed rate and variable interest rate debt is classified within Level 2 in the fair value hierarchy and has been calculated based on the quoted market prices of our securities.
The following reflects the principal amount of debt payments due over the next five years and beyond as of December 31, 2022:
Due |  | Total Principal Due |  |  |  | Series of Debt |  | Principal Due per Series of Debt
2023 |  | $ | 24 |  |  |  |  | Term Loan B |  | $ | 22 |
|  |  | Other |  | 2 |
2024 |  | 22 |  |  |  |  | Term Loan B |  | 22 |
2025 |  | 572 |  |  |  |  | 2025 Unsecured Notes |  | 550 |
|  |  | Term Loan B |  | 22 |
2026 |  | 22 |  |  |  |  | Term Loan B |  | 22 |
2027 |  | 22 |  |  |  |  | Term Loan B |  | 22 |
|  |  | Drawn Revolving Credit Facility |  | — |
2028 and beyond |  | 3,279 |  |  |  |  | 2028 Unsecured Notes |  | 700 |
|  |  | 2029 Unsecured Notes |  | 500 |
|  |  | Term Loan B |  | 2,079 |
Unamortized deferred financing costs and discount/premium |  | (47) |  |  |  |  |  |  |
Total debt book value as of December 31, 2022 |  | $ | 3,894 |  |  |  |  |  |  |
Credit Agreement L&W and certain of its subsidiaries are party to the LNWI Credit Agreement. This credit agreement includes (a) the LNWI Revolver, a revolving credit facility of $750 million that matures April 14, 2027, with up to $350 million available for issuances of letters of credit and (b) the LNWI Term Loan B, a term loan facility with an initial aggregate principal amount of $2,200 million that matures April 14, 2029. The LNWI Term Loan B amortizes in equal quarterly installments in an amount equal to 1.00% per annum of the stated principal amount thereof, with the remaining balance due at final maturity. LNWI may voluntarily prepay all or any portion of outstanding amounts under the LNWI Credit Agreement at any time, without premium or penalty, subject to redeployment costs in the case of a prepayment of Adjusted Term SOFR Rate (as defined in the LNWI Credit Agreement) loans on a day that is not the last day of the relevant interest period. The interest rate for the Term Loan B is either (i) Adjusted Term SOFR Rate (as defined in the LNWI Credit Agreement), which includes a credit spread adjustment ranging from 10 to 25 basis points, plus 3.00% per annum or (ii) a base rate plus 2.00% per annum. The interest rate for revolver borrowings is either (i) Adjusted Term SOFR Rate (or an alternative benchmark rate for non-US dollar borrowings) plus 2.00% per annum or (ii) a base rate plus 1.00% per annum, with one 0.25% per annum step-up and one 0.25% per annum step-down based on LNWI’s Consolidated Net First Lien Leverage Ratio (as defined in the LNWI Credit Agreement) at the end of future fiscal quarters. LNWI is required to pay commitment fees to revolving lenders on the actual daily unused portion of the revolving commitments at a rate of 0.30% per annum through maturity, subject to a step-down to 0.25% per annum or a step-up to 0.35% per annum based upon the achievement of certain Consolidated Net First Lien Leverage Ratios. SciPlay Revolver SciPlay Games, LLC (“SciPlay Holding”), a subsidiary of SciPlay, entered into the SciPlay Revolver, a $150 million revolving credit agreement that matures in May 2024, by and among SciPlay Holding, as the borrower, SciPlay Parent LLC, as a guarantor, the subsidiary guarantors party thereto (which are all domestic entities that comprise our SciPlay business segment), the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent. The interest rate is either Eurocurrency Rate (as defined in the SciPlay Revolver) plus 2.25% per annum (with one 0.25% leverage-based step-down to the margin and one 0.25% leverage-based step-up to the margin) or ABR (as defined in the SciPlay Revolver) plus 1.25% per annum (with one 0.25% leverage-based step-down to the margin and one 0.25% leverage-based step-up to the margin) at the option of SciPlay Holding. SciPlay Holding is required to pay to the lenders a commitment fee of 0.50% per annum on the average daily unused portion of the revolving commitments through maturity, which fee varies based on the total net leverage ratio and is subject to a floor of 0.375%. As of December 31, 2022, the commitment fee was 0.375% per annum. The SciPlay Revolver provides for up to $15 million in letter of credit issuances. On February 28, 2022, SciPlay entered into Amendment No. 2 to the SciPlay Revolver, that among other things, (i) amended certain interest rate provisions related to Sterling-denominated revolving loans, (ii) increased SciPlay’s capacity to acquire non-loan parties and (iii) allowed for the acquisition of Alictus (see Note 10). 2028 and 2029 Unsecured Notes On November 26, 2019, LNWI issued $700 million in aggregate principal amount of its 2028 Unsecured Notes and $500 million in aggregate principal amount of its 2029 Unsecured Notes. We used the net proceeds of the 2028 Unsecured Notes and the 2029 Unsecured Notes, together with cash on hand and borrowings under the revolving credit facility, to redeem $1,444 million in previously outstanding notes and pay accrued and unpaid interest thereon plus related premiums, fees, and costs, which redemption was completed on December 12, 2019, and to pay related fees and expenses of the offering. 2025 Unsecured Notes On July 1, 2020, we completed the issuance of $550 million in aggregate principal amount of 8.625% senior unsecured notes due 2025 in a private offering and received total net proceeds of $543 million. We used a portion of the net proceeds to redeem $341 million of previously outstanding notes and pay accrued and unpaid interest thereon plus related premiums, fees and costs, which redemption was completed on July 17, 2020, and used the remaining net proceeds to fund working capital and general corporate purposes. The following table sets forth the date of the indenture, redemption prices and dates and ranking, guarantees and collateral for each of our outstanding series of notes:
Series of Notes |  | Indenture Date |  | Redeemable at Make Whole Price Prior To(1) |  | Ranking, Guarantees and Collateral
2025 Unsecured Notes |  | July 1, 2020 |  | July 1, 2022 |  | Senior Unsecured
2028 Unsecured Notes |  | November 26, 2019 |  | May 15, 2023 |  | Senior Unsecured
2029 Unsecured Notes |  | November 26, 2019 |  | November 15, 2024 |  | Senior Unsecured
(1) Refers to the date prior to which such series of notes may be redeemed at a redemption price equal to 100% of the principal amount of such notes plus accrued and unpaid interest, if any, to the date of redemption plus a “make whole” premium. On or after such date, such notes may be redeemed at the prices specified in the indenture governing such notes.
Ranking, Guarantees and Collateral Borrowings under the LNWI Credit Agreement are senior secured obligations of LNWI, rank equally to all of LNWI’s existing and future senior debt and rank senior to all of LNWI’s existing and future senior subordinated debt, if any. The Unsecured Notes are senior unsecured obligations of LNWI, rank equally to all of LNWI’s existing and future senior debt and rank senior to all of LNWI’s existing and future senior subordinated debt, if any. Borrowings under the LNWI Credit Agreement and the Senior Notes are guaranteed by us and each of our current and future direct and indirect wholly owned domestic subsidiaries (other than LNWI, the unrestricted business entities comprising our SciPlay business segment and certain immaterial subsidiaries), subject to certain customary exceptions as set forth in the LNWI Credit Agreement and the indentures governing such notes. Borrowings under the LNWI Credit Agreement and the Senior Notes are structurally subordinated to all of the liabilities of our Non-Guarantor Subsidiaries. The obligations under the LNWI Credit Agreement are secured by a first priority lien on (1) substantially all the property and assets (real and personal, tangible and intangible) of LNWI and the other guarantors, and (2) 100% of the capital stock (or other equity interests) of the direct domestic subsidiaries of L&W, LNWI and the guarantors and 65% of the capital stock (or other equity interests) of the direct foreign subsidiaries of L&W, LNWI and the guarantors, in each case, subject to certain customary exceptions. The SciPlay Revolver is secured by a (i) first priority pledge of the equity securities of SciPlay Holding, SciPlay Parent LLC’s restricted subsidiaries and each subsidiary guarantor party thereto and (ii) first priority security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of SciPlay Parent LLC, SciPlay Holding and each subsidiary guarantor party thereto, in each case, subject to customary exceptions. Restrictive Covenants The credit facilities are subject to customary affirmative and negative covenants as well as a financial covenant. The financial covenant in the LNWI Credit Agreement is solely for the benefit of the revolving facility, is tested at the end of each fiscal quarter if the outstanding borrowings (excluding up to $5 million of undrawn letters of credit and any cash collateralized letters of credit) under the revolving facility exceed 30% of the commitments under the revolving facility, and requires that L&W and its Restricted Subsidiaries not be in excess of a maximum Consolidated Net First Lien Leverage Ratio of 4.50:1.00. Additionally, the SciPlay Revolver requires that SciPlay maintain a maximum Total Net Leverage Ratio not to exceed 2.50x and maintain a minimum Fixed Charge Coverage Ratio of no less than 4.00x. Failure to comply with any of the covenants in these agreements could result in a default under these agreements and under other agreements containing cross-default provisions. Such a default would permit lenders to accelerate the maturity of the debt under these agreements and other agreements containing cross-default provisions and, in the case of the LNWI Credit Agreement or SciPlay Revolver, to foreclose upon any collateral securing such debt. We were in compliance with the financial covenants under our debt agreements as of December 31, 2022. Debt Issuance Costs and Loss on Debt Financing Transactions We capitalize debt issuance costs associated with long-term financing arrangements and amortize the deferred debt issuance costs over the term of the arrangement using the effective interest method. The capitalized debt issuance costs associated with long-term debt financing, other than line-of-credit arrangements, are presented as a direct reduction from the carrying value of long-term debt, consistent with the treatment of unamortized debt discount. In connection with the new credit agreement in April 2022, we capitalized $44 million in financing costs, $33 million of which were presented as a reduction to long-term debt and $11 million were related to our revolving facility and included in other assets on our consolidated balance sheets. The following are components of the loss on debt financing transactions resulting from debt extinguishment and modification accounting:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Repayment of principal balance at premium | $ | 90 |  |  | $ | — |  |  | $ | — |
Unamortized debt (premium) discount and deferred financing costs, net | 57 |  |  | — |  |  | — |
Third party debt issuance fees | — |  |  | — |  |  | 1 |
Total loss on debt financing transactions | $ | 147 |  |  | $ | — |  |  | $ | 1 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI https://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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