S&P rates eOne notes B+

S&P said it affirmed our 'B+' long-term issuer credit rating on Entertainment One Ltd. (eOne) and assigned a B+ rating and 3 recovery rating to the proposed £425 million senior secured notes due in 2026.

eOne has announced that it intends to refinance its capital structure by issuing £425 million senior secured notes, the agency explained.

The transaction will be neutral for the company's leverage and will allow the group to extend its debt maturities and reduce its interest costs, S&P said.

The stable outlook indicates that over the next 12 months, eOne will continue to benefit from strong performance in its family and brands division, the agency said, and will deliver a successful slate of films and TV shows.

The outlook assumes that despite heavy investment in new content production and acquisitions, the group's adjusted debt-to-EBITDA will remain at lower than 4x on a sustainable basis, S&P said.

The ratings reflect the inherently high volatility of the content production and distribution industry, fierce competition and rising content production and film promotion costs, the agency said.

The group is smaller in terms of size and scope than the major Hollywood studios and larger independent TV and film content producers with which it competes, the agency said.

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