Moody's affirms Hit Entertainment

Moody's Investors Service said it affirmed Hit Entertainment Inc.'s B3 corporate family rating and Caa1 probability of default rating subsequent to a recent amendment and extension of the company's first-lien bank credit facility. Its senior secured first-lien bank credit facility is affirmed at B1 with the LGD assessment revised to LGD2, 18% from LGD2, 19% and its senior secured second-lien loan at Caa2 (LGD4, 68%).

The outlook remains negative.

The agency said it assessed the transaction as having offsetting features that make it appropriate to maintain the existing ratings and outlook.

The extension and financial covenant amendment provide Hit with more time to address weak leverage and coverage in advance of refinancing its debts, Moody's said.

Supporting its ratings is the underlying value of the company's preschool entertainment properties, in particular, Thomas the Tank Engine, the agency said.

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