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Viagogo takes out $330 million loan, says Moody’s

Viagogo has taken out a new US$300 million incremental term loan, according to Moody’s Investor Service, increasing the company’s debt to $2.5 billion.

However, according to Moody’s, there is no immediate impact on the company’s B3 Corporate Family Rating (CFR) or negative outlook.

Net proceeds from the loan, which is due in February 2027, will be used to enhance liquidity adding to balance sheet cash.

Moody’s suspects the excess cash will remain on Viagogo’s balance sheet to ensure liquidity is available to manage operations through the pandemic and will not be used to fund distributions or acquisitions.

“Despite Viagogo’s asset-lite business model, revenues remain dependent on the timing and number of live events globally as well as attendance levels which are expected to remain below historical venue capacity based on social distancing mandates and consumer sentiment,” says a statement from Moody’s.

“Viagogo’s credit profile continues to be pressured by cancellations and postponement of live events globally. We project Viagogo’s secondary ticket sales revenue will remain well below 2019 levels over the next several months followed by a gradual recovery around mid-2021; however, there are further downside risks in the event demand for live events remains depressed beyond mid-2021 in a scenario in which Covid-19 is not contained.”

“Viagogo’s credit profile continues to be pressured by cancellations and postponement of live events globally”

Moody’s says Viagogo’s B3 CFR incorporates good liquidity, supported primarily by significant cash balances exceeding $700 million pro forma for the incremental term loan B.

In November last year, Viagogo announced its acquisition of StubHub for US$4.05 billion in cash, a deal that brings together the world’s two largest secondary ticket sellers.

Subsequently, in January this year, Moody’s downgraded the corporate family rating of Pugnacious Endeavors (Viagogo’s parent company) to B2, before changing the company’s outlook from “stable” to “negative” – citing both a “lack of public financial disclosure” and “the absence of board independence” for its changed credit profile.

Recently, Viagogo was once again downgraded to B3.

The increased cash on hand should, analysis says, allow the company to operate with little to no revenue for another two years – given the impact of Coronavirus on the live events and ticketing industries.

“We expect a measured return to cash flow growth given a portion of live events in 2021 will represent postponed events for which tickets have already been sold, although incremental secondary ticket selling is likely to occur,” Moody’s says.

“Given the time needed to ramp revenues in 2021 to approach historical levels, particularly as permitted attendance will be kept below venue capacity to allow social distancing and consumers remain cautious about large social gatherings, we believe revenues in 2021 will remain well below 2019 levels.”


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