S&P rates Redbox loan B+

S&P said it assigned a B corporate credit rating to Redbox Automated Retail LLC.

The outlook is stable.

The agency also said it assigned a B+ rating and 2 recovery rating to the Redwood Merger Sub Inc.'s proposed $440 million first-lien secured credit facilities.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The credit facilities consist of a $40 million revolving credit facility due 2021 and $400 million term loan due 2021.

Redbox will be the borrower after the transaction closes, S&P explained.

The ratings reflect an expectation for meaningful revenue declines at the company over next several years, which offsets the company's strong market share in DVD rentals, wide U.S. geographic coverage, good profitability and healthy discretionary cash flow, the agency said.

Redbox is facing unfavorable secular trends stemming from a proliferation of video viewing alternatives, such as video-on-demand (VOD), transaction-video-on-demand (TVOD) and subscriber-video-on-demand (SVOD), S&P said, as well as greater competition for leisure time.

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