Fitch rates DNEG B+, notes BB-

Fitch Ratings said it assigned Prime Focus World NV (DNEG) a long-term issuer default rating of B+ with a stable outlook. Fitch also assigned DNEG plc’s senior secured notes of $375 million, an expected rating of BB-/RR3/57%.

“The ratings of DNEG are constrained by its small scale, limited diversification among clients and key projects, as well the inherent delay and cancellation risk of its content production segment, which limits revenue visibility,” Fitch said in a press release.

Proceeds will be used to refinance debt and fund shareholder remuneration. Fitch forecasts FFO gross leverage to a peak in FYE21 at 5.9x. “We expect this to be followed by gradual deleveraging to 5.4x by FYE22, which is consistent with a B+ rating,” Fitch said.

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