Moody’s gives Legends, notes B3

Moody’s Investors Service said it assigned to Legends Hospitality Holding Co., LLC a B3 corporate family rating and a B3-PD probability of default rating. Concurrently, Moody’s assigned a B3 rating to the company’s planned $350 million of senior secured notes due 2026. The outlook is stable.

Sixth Street Partners LLC will use the proceeds, an unrated $150 million senior secured revolver and the proceeds from $125 million of unrated senior unsecured PIK notes along with equity to buy a 51% in Legends, boost the company’s cash balance by more than $100 million and refinance its debt. Affiliates of New Mountain Capital are selling their entire stake. Affiliates of the New York Yankees and Dallas Cowboys will retain a significant minority equity stake, Moody’s said.

“Over $200 million in cash and revolver availability pro forma for the proposed transactions positions the company with adequate liquidity to fund the remaining months of cash burn caused by coronavirus related disruption to its customer’s arenas, events and locations,” said Edmond DeForest, Moody’s vice president and senior credit officer, in a press release.

“The ratings incorporate Moody’s expectations for Legends’ revenue and business operations to return to 2019 levels over the course of 2021, assuming the pandemic abates, leading to credit metrics in line with the B3 rating category, including financial leverage around seven times and low single-digit free cash flow to debt, by 2022,” DeForest added.

The outlook reflects Moody’s expectation for the resumption of attended live events by Legends’ largest customers in 2021 will drive debt to EBITDA below seven times, EBITA margins above 6% and free cash flow to debt near 3% in 2022.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.