S&P rates National CineMedia loan CCC+

S&P said it gave CCC+ issue-level rating and 3 recovery rating to the $50 million senior secured incremental term loan maturing in 2024 issued by National CineMedia Inc.'s subsidiary National CineMedia LLC (NCM). The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in default.

“Including the proceeds from the debt issuance, the company now has about $147 million of cash at the operating subsidiary and $6 million of remaining accounts receivable that it can collect. Because of this, we now believe NCM has sufficient liquidity to withstand a low-attendance environment for at least the next 12 months,” S&P said in a press release.

NCM also amended its credit pact to alleviate possible covenant pressure through mid-2022. The amendment waives its financial covenants through the second quarter of 2022. It loosens its 4.5x net senior secured leverage covenant and 6.25x total net leverage covenant in the third quarter of 2022 to 5.5x and 6.75x, respectively, the agency said.

NCM’s CCC+ rating and negative outlook are unchanged.

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