Moody’s Investors Service and S&P Global Ratings both reported last week that UFC Holding’s, LLC was looking to add on another $150 million to their current 1st lien Term Loan. The net proceeds for this add on would be used to pay off their outstanding revolver balance.
The add-on would increase their current term loan to approximately $2.45 billion, while also upsizing the revolver from $162.75 to $212.75 million.
Moody’s gave the loan, due in 2026, a B2 rating, judging it as “being speculative and a high credit risk.”
While Moody’s warns that the UFC’s high debt-to-EBITDA ratio (also known as leverage) levels will increase this year, as “cash flow from operations will decrease as long as the pandemic impacts the ability to hold live events with spectators in attendance,” it also notes that the UFC contracted deals shields them from some of the risks:
“UFC benefits from its long term media and pay per view (PPV) rights agreement with ESPN which provides for a substantial portion of total revenue and EBITDA.