Viagogo has taken out a new $330m (£250m/€279m) incremental term loan, which is due in February 2027 and increases the secondary ticketing company’s debt to $2.5bn.
According to Moody’s Investor Service, net proceeds from the loan will be used to enhance liquidity adding to balance sheet cash. It also noted there is no immediate impact on the firm’s B3 Corporate Family Rating (CFR) or negative outlook.
Moody’s said it predicts that the excess cash will remain on Viagogo’s balance sheet to ensure liquidity is available to manage operations through the COVID-19 pandemic and will not be used to fund distributions or acquisitions.
Moody’s said in a statement: “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.
“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.”
It also noted that Viagogo’s credit profile continues to be pressured by cancellations and postponement of live events globally. The analysis said it projects that 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.
Moody’s continued: “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.”
According to the analysis, the additional funds will allow Viagogo to operate with little to no revenue for another two years.
In June, the UK’s competition watchdog referred the $4.05bn merger between Viagogo and StubHub for an in-depth (Phase 2) investigation. The following month, the Competition and Markets Authority’s (CMA) rejected a proposal by Viagogo to sell StubHub’s European entities to ensure its buyout would be approved.
Image: Martin Fisch / CC BY 2.0 / Edited for size
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