Moody’s downgrades Merlin

Moody’s Investors Service said it downgraded to B3 from B2 corporate family rating and to B3-PD from B2-PD probability of default rating of Motion Midco Ltd. Moody’s also lowered to B2 from B1 ratings of the senior secured bonds, the terms loans and the revolving credit facility issued by Merlin Entertainment Ltd. and Motion Finco Sarl. Concurrently, Moody’s downgraded to Caa2 from Caa1 rating of the senior unsecured notes issued by Motion Bondco DAC.

“The rating action reflects the negative impact from the coronavirus pandemic on the company’s operations, as Merlin’s trading through the key third quarter will have continued to be affected by the government restrictions as well as customers’ fears to travel or go out. Approximately Several Midway attractions as well as Legoland California remained closed, and Moody’s sees an elevated risk of further weakness in demand and temporary closures of the attractions as the number of coronavirus cases is rising across many countries,” the agency said in a press release.

Moody’s said it also revised its forecast for Merlin’s recovery with like-for-like revenues likely to remain below 2019’s levels by around 25% in 2021 and by around 10% in 2022.

The outlook is negative.

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