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Moody’s cuts Sky Bet, rates facilities B2
Moody's Investors Service said it downgraded Cyan Blue Holdco 2 Ltd.’s (Sky Bet) corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD.
Concurrently, the agency assigned a provisional B2 rating to the proposed £810 million equivalent senior secured term loan B due 2024, and will subsequently withdraw the B1 rating of the existing £340 million term loan B due 2022, issued by Cyan Blue Holdco 3 Ltd., a subsidiary of Sky Bet.
Moody's also assigned a provisional B2 rating to the proposed extended £35 million senior secured revolving credit facility due 2023, to be borrowed by Cyan Blue Holdco 3 and Cyan Bidco Ltd., an indirect subsidiary of Sky Bet, and will subsequently withdraw the B1 rating of the existing £35 million revolver due 2021.
The outlook on all ratings is stable.
Proceeds from the £810 million new term loan B together with surplus cash (cash in excess of £40 million) will be used to repay the existing £340 million term loan B, to make a distribution to the shareholders (via repayment of the shareholder loans and cash dividends), and to pay the transaction fees. Based on March 2017 pro forma cash position, the distribution is expected to be around £481 million.
At close, the agency expects Sky Bet to have £40 million of cash in the balance sheet, pro forma for the repayment of £83 million vendor loan to Sky plc (Sky, Baa2 developing), and £35 million of undrawn revolver.
Moody’s said the action largely reflects the material increase in its adjusted leverage to about 5.8 times from 2.5 times, pro forma with this transaction, and based on last 12 months to March 2017 EBITDA, as well as the ability within the shareholder-friendly senior facilities documentation to increase total net leverage to 6.25 times through the use of incremental facilities.
© 2015 Prospect News.
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