Moody's rates Merlin notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to the proposed $400 million senior unsecured notes to be issued by Merlin Entertainments plc.

The Ba2 corporate family rating is unchanged and the outlook is stable.

The proceeds will be used for refinancing of the company's outstanding bank debt, Moody's explained.

The transaction is credit positive because it will slightly reduce debt and will provide more flexibility for further de-leveraging thanks to partial replacement of the term loans with drawing on the upsized revolving facility, the agency said.

The new notes will rank pari passu with all other unsecured obligations of the issuer and benefit from a negative pledge, Moody's said.

The new notes are senior unsecured obligations of the issuer and will represent virtually all of the group's outstanding debt, apart from finance leases, the agency added.

The company also increased its revolving credit facility to £600 million from £300 million and extended its maturity to 2023, the agency said.

The ratings reflect Merlin's strong position as a global operator of theme parks and attractions, with 125 attractions in 25 countries and more than 66 million visitors in 2017, Moody's said.

Merlin is the second-largest operator of visitor attractions globally after Walt Disney Co., the agency noted.

In spite of the company's resilient performance in recent years, Moody's said it continues to believe that the nature of the company's activities leaves it exposed to economic cycles and weather conditions, as well as accidents and other shocks, such as terrorist attacks.

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