Moody’s downgrades Outerwall, debt

Moody's Investors Service said it downgraded Outerwall Inc.'s corporate family rating from Ba2 to Ba3, probability of default rating from Ba2-PD to Ba3-PD and senior unsecured debt rating from Ba3 to B1.

The outlook was revised from stable to negative. The speculative grade liquidity rating of SGL-1 remains unchanged.

Moody’s said the ratings were lowered following Outerwall's 2015 fourth quarter earnings announcement, which reflected significantly deteriorated operating performance at its largest segment, Redbox, due to accelerated secular pressure in the physical rental business as well as the previously stated lack of a strong film slate in the second half of 2015. Redbox, which contributes 80% and 81% to the company's revenues and EBITDA, reported revenue decline of 17% in the fourth quarter and 6.4% for the fiscal year ended Dec. 31.

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