Industry's speculative debt dwarfs that of other sectors
Wanna lend some money to media and entertainment companies? Quite a few of them, especially those with weak credit ratings, will be looking to refinance debt over the next few years.
According to Standard & Poor’s Global Fixed Income Research, $211.1 billion in bonds and notes rated BB+ or lower issued by showbiz companies will come due by the end of 2016.
S&P data show that media and entertainment company speculative-grade debt maturing through 2016 dwarfs the collective junk bonds issued by any other industry group, including financial companies. Some $89 billion of that showbiz debt is rated B- or lower.
The ratings agency expects most companies will be able to refinance their debt in light of investor hunger for high-yield bonds. But, S&P notes that potential problems, such as Eurozone contagion, a hard landing of China’s economy, or an economic slowdown in the U.S. could make it difficult for companies with less-than-pristine credit to sell new bonds.
S&P says that operations that have CCC+ or lower bond ratings will face the greatest difficulty in refinancing. One such company cited in the report is — in a nomenclature coincidence — CC Media Holdings (rated CCC+), the parent of radio station and outdoor advertising company Clear Channel Communications.
Media and entertainment company speculative-grade (BB+ or lower) debt:
Due date Total
2012* $9.5 billion
2013 $21.1 billion
2014 $57.0 billion
2015 $65.6 billion
2015 $57.9 billion
* May 29 through Dec. 31, 2012
Source: S&P Global Fixed Income Research