S&P gives Cirque du Soleil CCC+

S&P said it assigned Spectacle Bidco Holdings Inc. (Cirque du Soleil) and Cirque Du Soleil Holdings USA Newco, Inc. CCC+ issuer ratings. The companies recently emerged from bankruptcy.

The agency also assigned B issue-level and 1 recovery ratings to the $316 million of first-lien debt and a CCC issue-level and 5 recovery ratings to the $300 million of second-lien debt.

“The CCC+ issuer credit rating reflects our expectation that Cirque may not generate cash flow sufficient to sustain its capital structure over the next two years and that leverage is likely to be very high through at least 2022,” S&P said in a press release.

The agency said it believes Cirque has adequate liquidity for the next 12 months. “We believe Cirque has about $150 million in unrestricted cash on hand. The credit facility permits the issuance of a $55 million revolving credit facility senior to the first-lien debt,” S&P said.

The outlook is negative, reflecting that Cirque’s very high leverage may be unsustainable, the agency said.

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