Moody's eyes Technicolor for upgrade

Moody's Investors Service said it placed on review for upgrade Technicolor SA's Caa2 corporate family rating, Caa2-PD probability of default rating and Caa3 senior secured instrument ratings.

Concurrently, Moody's placed on review for upgrade the Caa1 senior secured instrument rating of Technicolor USA, Inc. and the Caa1 guaranteed senior secured instrument ratings of Tech 6.

The agency changed the outlook on Technicolor, Technicolor USA, Inc. and Tech 6 to ratings under review from positive.

The review was prompted by Technicolor’s Tuesday announcement that shareholders approved the exceptional distribution of 65% of the capital of Technicolor Creative Studios SA in the form of dividend in kind.

“The spinoff of TCS and its listing on Euronext Paris, expected to occur on Sept. 27, complete the corporate restructuring and hence allow for the refinancing of Technicolor's €1.2 billion debt (at nominal amount and excluding lease liabilities) outstanding as of June 30, 2022,” Moody’s said in a press release.

The company will refinance its debt with a €623 million equivalent senior secured term loan due 2026 raised by TCS and funds raised by Technicolor, including a €250 million senior secured first-lien term loan and €125 million senior secured second-lien term loan due 2026 and €300 million of mandatory convertible notes.

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