S&P slices Technicolor Creative Studios

S&P said it dropped its ratings on Technicolor Creative Studios SA and its €624 million-equivalent term loan due in 2026 to CCC+ from B.

“Due to the material downward revision of EBITDA, we view TCS' liquidity as weak, even after factoring in potential cost-cutting (including staff and capital expenditure), and believe TCS could breach its first-lien debt covenant unless it obtains an amendment. TCS is due to report, on Nov. 30, 2022, its liquidity position for the end of the third quarter, following its spinoff and initial public offering, which closed at the end of September 2022,” S&P said in a press release.

The agency said it now forecasts TCS’ leverage exceeding 10x in the next 12 months. “This compares to our previous forecast of below 5.6x at end-2022, and gradually decreasing.”

The outlook is negative.

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