S&P affirms Golden Eagle on upsized loan

S&P said it affirmed the BB- rating with recovery rating of 2 on Global Eagle Entertainment Inc.'s proposed senior secured first-lien credit facilities after the company said that it plans to increase the size of its first-lien term loan by $40 million to $500 million.

The revised capital structure will include an $85 million revolving credit facility and the $500 million term loan.

The proceeds will be used to refinance its existing debt following the acquisition of Emerging Markets Communications, LLC. The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P said it withdrew the B- rating and 6 recovery rating on the company's proposed second-lien term loan since the company will no longer include this debt in its proposed financing.

The B- rating and 6 recovery rating on the company's existing $83 million senior unsecured convertible notes is unchanged. The 6 recovery rating indicates 0 to 10% expected default recovery.

The company’s B+ corporate credit rating and stable outlook also are unchanged.

The stable outlook reflects an expectation that Global Eagle's high leverage of about 6x in 2016 will decline significantly to the mid-4x range in 2017, benefiting from organic EBITDA growth and potential acquisitions, S&P said.

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