Fitch assigns Lions Gate B

Fitch said it assigned a B long-term issuer default rating with a stable outlook to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate Capital Holdings LLC. In addition, Fitch gave issue level ratings at Lions Gate Capital of BB/RR1 to the first-lien senior secured debt and B-/RR5 ratings to the unsecured debt.

“The B IDR reflects Lions Gate's scale and leadership in film and television content production, the strength of the Starz-branded premium subscription video services, and the value of the Lions Gate's expansive content library. The ratings also reflect Lions Gate's elevated Fitch-calculated total leverage, as measured by total debt with equity credit/operating EBITDA, inclusive of the account receivable facility and production loans, of 9x as of Sept. 30, 2021,” Fitch said in a press release.

The outlook incorporates the view that strengthening the balance sheet is a capital allocation priority over the near-term and that management will use excess free cash flow to lower debt and explore other capital raising options to further reduce leverage to a level that is more consistent with the rating category, the agency said.

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