S&P rates Cineworld loan B-

S&P said it assigned Cineworld Group plc’s new $561 million of senior secured term loans a B- with a 1 recovery rating (rounded estimate: 95%). The agency also downgraded Cineworld and its senior secured debt to SD and D from CCC- on Thursday because it views the financing transaction as distressed. S&P then raised the group’s ratings to CCC from SD and D on Friday.

“We view the transaction as distressed and not opportunistic as, absent this new financing, the group would likely have faced a conventional default over the near term, as its liquidity was reducing due to cash burn. Cineworld would also have breached covenants at the December 2020 testing, unless it obtained a waiver as part of the transaction,” S&P said in a press release.

Cineworld issued a $450 million senior secured term loan and $111 million senior secured term loan due in May 2024, refinanced the $111 million additional revolver due in December, and obtained waivers on financial covenants through to the end of June 2022.

“In our view, Cineworld’s capital structure remains unsustainable over the medium term, with S&P Global Ratings-adjusted leverage above 10x in 2021 and minimal free cash flow,” S&P said.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.