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S&P rates Vivid Seats loan B
S&P said it affirmed the B corporate credit rating on Vivid Seats LLC.
The outlook is stable.
The agency also said it assigned a B rating and 3 recovery rating to the company's proposed $575 million first-lien secured credit facility, which consists of a $50 million revolving credit facility due 2022 and $525 million term loan due 2024.
The 3 recovery rating indicates 50% to 70% expected default recovery.
Vivid Seats also is issuing an unrated $185 million second-lien senior secured term loan due in 2025 that has been pre-placed.
The proceeds will be used from the proposed credit facilities to refinance its existing credit facility and fund the strategic investment, S&P said.
The agency also said it will withdraw the ratings on the company's existing debt after it is repaid.
Vivid Seats recently announced that it will seek to raise $760 million of new senior secured credit facilities, S&P said.
It will use the proceeds, along with cash on the balance sheet, to refinance its existing credit facility and finance its acquisition by a new sponsor, the agency said.
On May 16, Vivid Seats announced it signed a definitive agreement with new investor GTCR LLC, the agency said. The transaction also involved participation from existing investor, Vista Equity Partners LLC and Vivid Seats' management, S&P said.
The B corporate credit rating reflects a view that Vivid Seats will continue to generate strong cash flow with adjusted debt leverage remaining at higher than 6x over the next 12- to 18-months, the agency said.
The rating also consider the relative competitive nature of the secondary ticket market, S&P said, and Vivid Seat's relatively low brand awareness and lack of distinctive or differentiating products versus its main competitors.
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