S&P cuts EP Global

S&P said it lowered all its ratings for EP Global Production Solutions LLC (Entertainment Partners), including the issuer rating to B- from B, and placed them on CreditWatch with negative implications.

“The CreditWatch negative placement reflects that operating performance will remain depressed in 2023 from the Hollywood strikes. Entertainment Partners' recently reported second-quarter results which were heavily stressed by the labor disputes as gross wages declined 18% and EBITDA was down 40%.

“As the strikes persist, we forecast challenges in its operating performance will continue to reduce revenue and EBITDA in the next year. We revised our forecast to account for the weak performance as about 75% of gross wages are tied to the union strikes. While we expect a resurgence once the labor disputes are resolved, a resolution soon remains uncertain,” S&P said in a statement.

The agency warned of a possible downgrade if the strikes continue and operating performance remains depressed, leading to substantial cash flow shortfalls.

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