S&P rates SFX notes B-

Standard & Poor's said it assigned a preliminary corporate credit rating of B- to SFX Entertainment Inc.

The agency also said it assigned a preliminary rating of B- to the company's $200 million senior secured second-lien notes with a preliminary recovery rating of 3, indicating 50% to 70% expected default recovery.

The outlook is negative.

The ratings are based on the company's rapid expansion through acquisitions in the electronic dance music live-event niche, S&P said.

The ratings also reflect the company's limited track record, acquisitive growth strategy, lack of business diversity, risks associated with having the company's founder leading the company's strategy and headline risks related to substance abuse at its events, the agency said.

Although live electronic dance music events have been popular for more than a decade, it predominately resonates with the millennial generation and may not have enduring appeal as this generation is known to be the most open to change, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.