S&P downgrades MGM, facility

S&P said it lowered its corporate credit ratings on Metro-Goldwyn-Mayer Inc. to BB- from BB.

The outlook is stable.

At the same time, the agency lowered its issue-level rating on the company's senior secured credit facility to BB+ from BBB-. The recovery rating remains 1, indicating an expectation for very high recovery (90%-100%; rounded estimate: 90%) of principal in the event of a payment default.

“The downgrade reflects our expectation for increased leverage and reduced cash flow generation over the next 18-24 months as MGM ramps up its content investments in both its media networks and film units,” S&P said in a news release.

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