The bond will act as a payday for its shareholders, who stand to receive about 280 million pounds in the form of a dividend from the debt sale. Management told investors during this week’s meetings that the cash equity the sponsors had prior to the dividend was around 200 pounds, which means its entire holding has been taken off the table.
In its prospectus, Pinewood said uncertainty in global economic and geopolitical conditions threatens commercial relationships with its customers, suppliers and creditors. “If our customers suffer financial difficulty, they may not pay us, which would have a material adverse effect on our business, financial condition or results of operations,” according to the document.
On the upside, the studio recently signed 10-year contracts with Disney and Netflix. The contracts materially change the traditional, short-term hire business model and improve its turnover visibility, the company said in the prospectus.
That helped Pinewood win a one-notch upgrade from S&P Global Ratings on Monday, to BB-. The ratings firm said it expects the studio to “generate consistent income over at least the next 12 months, supported by the long leases, the growing demand for media content, and Pinewood’s long-term relationships with the major global film producers.”
Moody’s took a different view, downgrading Pinewood’s debt the next day by one level to Ba3, saying the “spike” in leverage “is a key credit negative.”
Representatives for Pinewood were unavailable for comment.
--With assistance from Paul Cohen.
This article was provided by Bloomberg News.