S&P ups ECL, rates facility B+

S&P said it raised its issuer rating for ECL Entertainment LLC to B+ from B and assigned B+ issue and 3 recovery ratings to its new $380 million term loan due 2030 and a $50 million revolver due 2028.

“Over the next two years, ECL will likely generate approximately $40 million of FOCF annually (prior to dividends to its owners for tax payments) translating into approximately 10% FOCF to debt, which supports a one-notch upgrade. In addition to solid operating performance over the past year, we expect this refinancing will reduce its cash interest expense by about $10 million annually as its current debt was a higher-cost construction loan. Therefore, we expect cash flow to be higher than our previous forecast,” S&P said in a press release.

ECL plans to use the proceeds to repay its outstanding term loan, refinance the existing revolver, and cover transaction expenses. “We expect the transaction will reduce the company's interest expense,” S&P said.

The outlook is stable.

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