S&P lifts Odeon, loan, notes

Standard & Poor's said it raised its long-term corporate credit rating on Odeon & UCI Cinemas Group Ltd. to B- from CCC+.

The outlook is stable.

At the same time, the agency raised its debt rating on Odeon's super senior revolving credit facility to BB- from B+ and its ratings on the senior secured notes due in 2018 to B- from CCC+. The recovery ratings of 1+ on the super senior revolver and 4 on the senior secured notes are unchanged and reflect an expectation of full (100%) recovery and average (30%-50%) recovery, respectively, in the event of default. S&P assesses the senior secured notes' recovery as being at the higher half of the range.

The agency estimates Odeon had £2.2 billion in adjusted debt outstanding as of Dec. 31, 2015.

S&P said the upgrade reflects its expectation that continued good operating performance in all Odeon's markets will result in credit measures that indicate that the capital structure is sustainable over the long term.

For example, S&P’s adjusted debt-to EBITDA leverage of 10 times to 10.5 times over the next two years corresponds with about 6.5 times to 7 times excluding shareholder loans, and EBITDA-to-interest cover of about 1.3 times reflects EBITDA to interest of about 2.5 times to 3 times, excluding adjustments. The agency therefore believes that Odeon will be able to refinance the senior secured debt issues due in 2018, in order and on time.

© 2015 Prospect News.
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