Moody's rates HIT Entertainment

Moody's Investors Service said it assigned ratings to HIT Entertainment Ltd., including a B1 corporate family rating, B1 senior secured bank rating and a provisional B3 senior subordinated note rating.

The ratings reflect the significant financial risk at inception as HIT is highly leveraged with sizable annual programming expenses and a competitive operating environment, offset by HIT's attractive assets with strong brand value and good growth opportunities, sizable equity contribution from the sponsor and meaningful enterprise value relative to the debt, the agency said.

Assigned ratings include a B1 rating to the $77 million senior secured revolving credit facility due 2011, - a B1 rating to the $376 million senior secured Term Loan B due 2012 and a provisional B3 rating to the $172 million or proposed senior subordinated notes due 2013.

The outlook is stable.

The ratings also consider the operating risks HIT faces in its pre-school focused business segments, including growing competition for viewers, new programming from Nick jr. and Noggin as well as a new channel launch by the Cartoon network, Tickle U, Moody's added.

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