S&P revises Technicolor to positive

Standard & Poor's said it revised its outlook on Technicolor SA and its subsidiary Thomson Licensing SAS to positive from stable.

The agency also affirmed its B+ long-term ratings on both companies and B short-term corporate credit rating on Technicolor, in addition to the B+ issue rating on Technicolor's senior secured debt. The recovery rating remains at 3, indicating an expectation of meaningful recovery (50%-70%; higher half of the range) in the event of a default.

S&P also affirmed its B+ issue rating on the senior secured debt issued by Technicolor's Luxembourg-based special-purpose vehicle Tech Finance & Co SCA.

S&P said the outlook revision reflects its view that Technicolor will continue to post a stable operating performance and reduce debt, before the likely sharp earnings decline after its MPEG-LA licensing revenue is phased out in 2016-2017. The agency believes Technicolor will maintain S&P-adjusted debt to EBITDA comfortably between 2 times and 2.5 times, reported free operating cash flow above €150 million, and "strong" liquidity, despite business hurdles.

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