Moody’s gives Cirque du Soleil Caa1

Moody’s Investors Service said it gave Cirque du Soleil Holding USA NewCo, Inc. a Caa1 corporate family rating and a Caa1-PD probability of default rating.

Concurrently, Moody’s assigned a B2 rating to its $316 million senior secured first-lien term loan due November 2025 and a Caa2 rating to its $300 million second-lien term loan due November 2027. Cirque du Soleil Canada Inc. is a co-borrower. The top holding company Spectacle Bidco Holdings Inc. will guarantee the loans.

“The $316 million first-lien term loan due November 2025 is rated B2, two notches above the Caa1 corporate family rating, reflecting its senior position in the capital structure. The B2 outcome incorporates a one-notch override on the loss-given default model outcome of B1 given the allowance under the terms of the credit agreement for the issuance of up to $55 million in a revolving credit facility that would have priority ranking senior to the first-lien term loan, and our assessment of low asset protection. The $300 million second-lien PIK term loan due November 2027 is rated Caa2, one notch below the corporate family rating, reflecting its junior position and ranking behind the first-lien debt,” Moody’s said in a press release.

The outlook is negative.

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