Viagogo took advantage of an additional loan to boost its liquidity as it weathered the storm of the coronavirus pandemic. The company, which recently struck a $ 4 billion cash deal to buy StubHub from eBay, announced a $ 330 million loan maturing in February 2027.

According to Moody’s analysis, the increase in the loan on the company’s leverage and loan balances does not have an immediate negative impact on the company’s credit ratings. The increase in available liquidity should, according to the analysis, allow the company to operate with little or no income for another two years.

“We expect a measured return to cash flow growth as a portion of live events in 2021 will represent postponed events for which tickets have already been sold, although an additional secondary ticket sale is expected. likely to occur, “he says. “Given the time needed to increase revenues in 2021 to approach historic levels, especially since authorized traffic will be kept below the capacity of sites to allow social distancing and consumers remain cautious of large gatherings social, we believe revenues in 2021 will remain well below 2019 levels. “

The full analysis is available below:

Announcement: Moody’s Says Viagogo’s Additional $ 330 Million New Term Loan Improves Liquidity; no immediate impact on B3 CFR

Global Credit Research – August 24, 2020

New York, August 24, 2020 – Moody’s Investors Service (“Moody’s”) has stated that PUG LLC (dba Viagogo) recently announced a new supplemental B term loan in the amount of $ 330 million maturing in February 2027. The proceeds Net of the additional term loan will be used to improve liquidity by adding cash to the balance sheet. Although the additional debt increases leverage and increases term loan balances to $ 2.5 billion, there is no immediate impact on the Family of Business (CFR) B3 rating or negative outlook for the business. We anticipate that excess cash will remain on Viagogo’s balance sheet to ensure cash is available to run operations during the pandemic and will not be used to fund distributions or acquisitions.

Despite Viagogo’s lean asset business model, revenues remain dependent on the schedule and number of live events around the world as well as attendance levels which are expected to remain below historical capacity of sites based on distancing mandates social and consumer sentiment. Viagogo’s credit profile continues to be under pressure from cancellations and postponement of live events around the world. We expect Viagogo’s secondary ticket sales revenue to remain well below 2019 levels over the next several months, followed by a gradual recovery towards mid-2021; However, there are other downside risks in the event that demand for live events remains depressed beyond mid-2021 in a scenario where COVID-19 is not contained.

Viagogo’s B3 CFR incorporates good liquidity, supported primarily by large cash balances exceeding $ 700 million pro forma for the B-incremental term loan. Given a reduced monthly utilization rate, the cash balances allow for Viagogo to operate with only nominal amounts of income for two years. Our baseline projections include gradual revenue growth through mid-2021 as more live events are scheduled across the world next year. Ticket sales take place a few months before the events, which typically generates cash inflows and positive working capital.

We expect a measured return to cash flow growth as a portion of live events in 2021 will represent postponed events for which tickets have already been sold, although an additional secondary ticket sale is likely to occur. produce. Given the time needed to increase revenues in 2021 to approach historic levels, especially as allowed traffic will be kept below the capacity of sites to allow social distancing and consumers remain cautious of large social gatherings. , we believe revenue in 2021 will remain well below 2019 levels.

Viagogo’s strong liquidity is supported by more than $ 700 million in pro forma unallocated cash balances for the new B-incremental term loan, working capital inflows from initial cash receipts before repayments to ticket vendors, minimum capital expenditure and 35% uptime under $ 125. One million euro revolving credit facility maturing in 2025. Given the spring commitment in the revolver, we assume that the remaining part of the revolver will not be available in the coming quarters. Payments owed to ticket sellers totaling $ 170 million are expected to be stable through 1Q2021, with the reduction in historical payments owed to sellers to be more than offset by cash inflows from new revenue. The company indicates that the remaining severance pay and other restructuring costs are not significant.

Viagogo provides an online marketplace for secondary tickets as well as payment assistance, logistics and customer service. With the acquisition of StubHub, the combined company is a global leader in the ticket market. Viagogo is majority owned by Madrone Capital Partners, Bessemer Venture Partners and Eric Baker, CEO and founder, with Mr. Baker controlling majority votes.

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