S&P puts Cast & Crew on watch

S&P said it placed its ratings for Cast & Crew LLC on CreditWatch with negative implications.

“We believe the concurrent Hollywood strikes will weaken Cast & Crew's operating performance significantly. As the strikes continue, we expect there will be severe revenue and margin contraction from cancelled and delayed shows. We believe live events will partially mitigate some of these pressures but expect the company's credit metrics to weaken below our downgrade threshold.

“Cast & Crew has adequate liquidity for the near term, but an upcoming revolver maturity threatens availability. The company has a cash balance of $83 million and full revolver availability at the end of the third quarter of 2023, which we expect is sufficient to weather the short-term macroeconomic environment. We believe refinancing risks are present should the strikes be prolonged due to the revolver maturing in 2025,” S&P said in a press release.

The agency said it aims to resolve the watch after it has more visibility on the company’s plans to restore its credit quality, which means the strike is resolved, Cast & Crew refinances its revolver or a plan to get leverage below 7x.

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