Moody's gives EP Global loans B1

Moody's Investors Service said it gave B1 ratings to EP Global Production Solutions LLC’s (Entertainment Partners) expected $850 million first-lien term loan and $110 million first-lien revolving credit facility. EP Purchaser, LLC will be the borrower. The company is also issuing a new unrated $200 million second-lien term loan.

Concurrently, the agency assigned first-time ratings to the company, including a B2 corporate family rating and B2-PD probability of default rating.

“The B1 rating for Entertainment Partners' proposed first-lien bank credit facilities reflects a B2-PD PDR and two class debt structure with the first-lien facilities receiving support from the first-loss tranche second-lien term loan. The $110 million first-lien revolver, the $850 million first-lien term loan, and the $200 million second-lien term loan mature in 2026, 2028 and 2029, respectively,” Moody’s said in a press release.

The B2 corporate family rating indicates the company’s high leverage at about 7.3x debt/EBITDA, Moody's adjusted as of end of June, including the treatment of software development cost as an expense and pro forma for the new credit facilities. “Leverage is expected to reduce below 6x as the production industry continues to recover from the depths of the pandemic,” the agency said.

The outlook is stable.

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