Financial ratings agency Standard and Poor’s (S&P) will give Inter’s bond a rating of BB- upon receiving all the relevant paper work.
S&P released a statement on the matter and believes Inter’s revenue growth forecasts are “based on aggressive growth assumptions, particularly with regard to sponsorship and advertising.”
Other key points from the statement include:
- Inter Media and Communication S.p.A. (MediaCo) expects to issue a €300 million senior secured bond due Dec. 31, 2022, and use the proceeds to refinance debt, upstreaming the remainder to its parent, football club Internazionale Milano (TeamCo).
- MediaCo will service the bond via revenues from media and sponsorship contracts, which depend on TeamCo’s onfield performance; therefore the debt is exposed to high cash flow volatility.
- Additionally, 91% of the debt remains outstanding at maturity, exposing the company to substantial refinancing risk.
- The stable outlook reflects our expectation that MediaCo will generate revenues supporting our forecast of a minimum annual debt service coverage ratio of at least 2.5x after 2022 and 4.5x before 2022.