S&P gives Fanatics BB-, loans BB

S&P said it assigned Fanatics Collectibles Intermediate Holdco Inc. a BB- issuer rating and its planned $300 million senior secured term loan A and a $100 million revolving credit facility BB issue and 2 recovery ratings. The outlook is stable.

Concurrently, the agency affirmed its BB- issuer ratings on parent Fanatics Holdings Inc. (FHI) and Fanatics Commerce Intermediate Holdco LLC.

“Our rating on Fanatics Collectibles reflects our view that it is integral to FHI's overall identity and strategy, following its acquisition of Topps' sports and entertainment business. In our view, Fanatics Collectibles and Fanatics Commerce constitute FHI's mainstream business, with each segment expected to contribute a significant portion of EBITDA.

“Fanatics Collectibles is closely aligned with Fanatics Commerce based on their target markets and reliance on licensing partnerships with sports leagues and other intellectual property (IP) owners. We believe FHI is committed to supporting both entities, thereby maintaining its good relationships with licensing partners, which we view as one of the most important elements of its business model. Accordingly, we assess Fanatics Collectibles as a core subsidiary of FHI,” S&P said in a statement.

The agency said it expects the company’s S&P Global Ratings-adjusted debt to EBITDA to increase to the high-3x area as of year-end 2023 from the mid-2x area as of year-end 2022 at FHI, reflecting the planned debt issuance at Fanatics Collectibles and higher costs associated with subsidiary investments.

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