Moody's might lower Getty

Moody's Investors Service said it placed the ratings of Getty Images, Inc. on review for downgrade. The company has a B2 corporate family rating and a B2-PD probability of default rating. Its $150 million first-lien senior secured revolving credit facility due 2017 and $1.9 billion first-lien senior secured term loan due 2019 are rated B1 (LGD3, 38%), and its $550 million of 7% senior notes due 2020 have a Caa1 (LGD6, 90%) rating.

The agency said the review is driven by increased debt-to-EBITDA ratios and reduced free cash flow generation reflecting weakness in the company's midstock imagery segment combined with heightened investment in marketing and product development. Moody's views the financial metrics as being outside its expectations for the B2 rating, and it believes they will remain outside the rating for at least two to three fiscal quarters.

The review will focus on Getty Images' operations, particularly the agency's view of management's ability to stabilize revenue and cash flow in the midstock imagery segment despite economic weakness in Europe and heightened competition. Moody's will also consider the company's ability to maintain adequate liquidity, including full access to its revolver facility, and reduce debt-to-EBITDA ratios.

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