S&P lifts Deluxe Entertainment

Standard & Poor’s said it raised the corporate credit rating on Deluxe Entertainment Services Group Inc. to B- from CCC+.

The outlook is stable.

The agency also said it raised the rating on Deluxe’s senior secured term loan facility to B- from CCC+. The 4 recovery rating is unchanged, indicating 30% to 50% expected default recovery.

The upgrade reflects an expectation that Deluxe’s liquidity, while currently less than adequate, will improve to adequate over the next few quarters as the company returns to generating sustained free cash flow, S&P said.

The company’s financial results will benefit from a strong global film production slate in 2015 and 2016, the agency said, with an increase in the number of big production tent-pole films.

Along with cost-saving measures that the company undertook toward the end of 2014 and into the first half of 2015, these factors should result in significant EBITDA growth and improve its liquidity position over the next year, S&P said.

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