S&P gives Vue CCC+, loans B, CCC+

S&P said it gave CCC+ ratings to Vue Entertainment International Ltd. and its €648 million reinstated senior facility. The recovery rating is 3. The agency also rated Vue’s €95 million super senior facility B with a 1 recovery rating. The new ratings follow Vue’s restructuring.

Concurrently, S&P withdrew its ratings on Vue Bidco plc, the pre-restructuring parent.

“We think Vue will be dependent on favorable market conditions to maintain sufficient liquidity and sustain its new capital structure because its adjusted leverage will remain high (over 7x expected in fiscal year ending Nov. 30, 2023), and free cash flow generation weak and vulnerable to still subdued cinema admissions,” S&P said in a press release.

The outlook is stable, which assumes leverage hovering in the 7x-8x area that free operating cash flow after leases will improve to break even in fiscal 2024 and that it will maintain adequate liquidity to support its operations and avoid a covenant breach.

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