S&P downgrades Getty Images

Standard & Poor's said it lowered its corporate credit rating on Getty Images Inc. to B- from B.

The outlook is negative.

At the same time, the agency lowered issue-level rating on the company's first-lien credit facilities to B- from B. The 3 recovery rating remains unchanged, indicating an expectation for meaningful recovery (50%-70%; low end of the range) of principal in the event of a payment default.

S&P also downgraded its issue-level rating on Getty Images’ unsecured notes to CCC from CCC+. The 6 recovery rating remains unchanged, indicating an expectation for negligible recovery (0%-10%) of principal in the event of a payment default.

"The downgrade reflects Getty Images' rising debt leverage and lower free cash flow due to poor operating performance in the company's midstock segment amid increased competitive pressure," S&P credit analyst Elton Cerda said in a news release.

The agency expects that Getty Images' leverage will continue to rise because its operating performance will likely remain soft in the first half of 2015 due to competitive pressure. Additionally, S&P expects that the company will increase marketing spending in 2015 to drive revenue growth.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.