S&P rates CEC CCC, loan B-

S&P said it assigned CEC Entertainment LLC a CCC issuer rating after emerging from bankruptcy and a B- rating to its planned $200 million first-lien exit facility with a 1 recovery rating. The 1 recovery rating indicates an expectation that lenders will receive very high recovery (90%-100%; rounded estimate: 95%) in default.

The outlook is negative.

“The CCC rating and negative outlook reflect our view that CEC will face an arduous path to recover the sales and EBITDA it lost during the pandemic due to the continued negative short-term prospects for the out-of-home entertainment industry,” S&P said in a press release.

Loan proceeds will be used to repay the $200 million debtor-in-possession loan. CEC’s capital structure will also include a $175 million second-out term loan.

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