S&P ups, rates Merlin notes B+

S&P said it assigned a B+ rating to Merlin Entertainment Ltd.’s planned €650 million bond and upgraded Merlin and intermediate holding company Motion Midco Ltd. to B from B-, the ratings on the outstanding senior debt to B+ from B, and the ratings on the senior notes to CCC+ from CCC. The recovery rating on the senior debt is 2, indicating a rounded estimate of 70% recovery in default.

The bond proceeds will be used to refinance Merlin’s €500 million notes due in 2025 and other debt obligations.

“The benefits of Merlin's geographic diversification, multi-brand attractions, and continued investment in new attractions during the pandemic will support revenue growth in 2023. Additionally, notwithstanding the recent turmoil in global banking sectors, we forecast economic indicators will be more resilient than in December 2022, when we last reviewed our rating on Merlin. We now foresee slightly positive GDP growth of about 0.7% in the U.S. and about 0.3% in the eurozone this year, up from zero previously,” S&P said in a press release.

The outlook is stable.

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