S&P rates Global Eagle, facility B-

S&P said it assigned its B- corporate credit rating to Global Eagle Entertainment Inc. The outlook is negative.

At the same time, the agency assigned its B- issue-level rating to the company's first-lien term credit facility, which includes a $500 million term loan and $85 million revolver. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default.

S&P said the rating on Global Eagle reflects risks associated with high debt leverage and negative free operating cash flow.

The agency said the rating also reflects significant management turnover over the past year, numerous internal control deficiencies, operations in a narrow telecommunications niche, revenue concentration with Southwest Airlines and the fragmented and the competitive nature of the satellite-based connectivity market.

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