Moody’s cuts Fanactics loan

Moody’s Investors Service said it lowered its rating for Fanatics Commerce Intermediate Holdco, LLC’s senior secured term loan to B1 from Ba3 and revised its outlook for the company to negative from stable. The agency affirmed Fanatics Commerce’s Ba3 ratings.

The downgrade reflects the higher-than-anticipated borrowings under Fanatics Commerce $700 million asset-based revolving credit facility and slower-than-expected business growth, Moody’s said. The term loan is positioned behind the ABL facility.

“The outlook change to negative reflects the company's significantly weaker than expected earnings and cash flow, and the risk that the increasingly difficult operating environment will challenge its ability to achieve the appropriate level of returns on its current investments and return EBITDA and EBITDA margins back to their previous levels. Adjusted EBITDA has materially declined due to planned investments in the fan experience, slowing revenue growth and increased costs to take on new rights,” Moody’s said in a press release.

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