S&P downgrades Zuffa

Standard & Poor’s said it lowered its corporate credit rating on Zuffa LLC to BB- from BB. The outlook is stable.

At the same time, S&P lowered the issue-level rating on Zuffa’s $535 million senior secured credit facility to BB from BB+. The recovery rating remains 2, indicating an expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The facility consists of a $60 million senior secured revolving credit facility due 2018 and a $475 million senior secured term loan due 2020.

“The downgrade reflects our revised forecast for 2014 EBITDA to decline approximately 30%, and our expectation that debt to EBITDA will increase to the high-4x area in 2014 compared to our previous expectation for leverage in the low-3x area,” said S&P credit analyst Stephen Pagano in a news release.

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