S&P rates Technicolor Creative, loan B

S&P said it preliminarily assigned B ratings to Technicolor Creative Studios and its planned €623 million-equivalent term loan. TCS also plans to obtain a €40 million revolving credit facility expected to remain undrawn at closing.

“Our rating factors in TCS' strong position and supportive growth prospects for visual effects and animation activities, but reflects still modest FOCF generation following its planned spin-off from Technicolor SA in third-quarter 2022. The spun off entity operates in an industry with favorable tailwinds, and we believe TCS will benefit from increasing content spending that supports the growth prospects of its film and episodic visual effects (FEV) segment,” S&P said in a press release.

The agency said it sees TCS’ leverage under 5.6x at Dec. 31 and that it will gradually decline on revenue and EBITDA growth.

The outlook is stable.

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