Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's assigns provisional rating to proposed amended Village Roadshow Films (BVI) Limited film finance facility

12 May 2010

$1,000 Million in loan interests rated.

New York, May 12, 2010 -- Moody's Investors Service (Moody's) has assigned the provisional rating of (P)A2 to the proposed new tranches to be effected by amendment to the existing credit facility, currently rated A2, extended to Village Roadshow Films (BVI) Limited (Borrower), an indirect subsidiary of Village Roadshow Pictures Group (VRPG). The new tranches of the amended credit facility will consist of the Class A-1 Ultimates Facility, the Class A-2 Ultimates Facility, and the New Films Facility (collectively, the Credit Facility) and will replace the existing tranches. This transaction is a securitization of international film and distribution rights and related net cash flows from a seasoned slate of 64 films plus any future financed films.

The complete rating action is as follows:

$250,000,000 Class A-1 Ultimates Facility, rated (P)A2

$500,000,000 Class A-2 Ultimates Facility, rated (P)A2

$250,000,000 New Films Facility, rated (P)A2

VRPG, founded in 1997, is the film production division of Village Roadshow Entertainment Group (VREG) which also owns the Concord Music Group. VREG is approximately 40% owned by Village Roadshow Limited (VRL), a publicly listed company based in Australia. Since VRPG's creation, 64 films have been co-financed with major motion picture studios, primarily Warner Bros. (WB, a subsidiary of Time Warner Inc. -- Baa2). The 60 films co-financed with WB since 1997 represent almost one-quarter of WB's film production over this period.

The collateral for the Credit Facility are the international film rights and net cash flows from the current slate of films and future films which may be co-financed. (The international film rights include all regions other than U.S. and Canada.)Moody's provisional ratings of the Credit Facility are primarily based on: (i) substantial equity both contributed and internally accumulated through the performance of the current film slate (as reflected by current valuations); (ii) the substantial role of WB in this Credit Facility as demonstrated by agreements for sub-distribution, back-up distribution, and certain advances required at the request of the lenders; (iii) structural features within the transaction to protect lenders such as a dynamic borrowing base, minimum equity requirements, and subordination of some repayment for prints and advertising cost advances; and (iv) alignment of interests of all transaction parties supported by structural features whereby cash leakage or other distributions out of the Credit Facility to the sponsor are extremely limited.

The main risks to this Credit Facility are the potential for investment in future films which perform poorly and possible performance volatility of the existing library. As the Credit Facility expects to fund future films during a three-year revolving period, the performance of these new films may vary greatly. For the films already in the library, individual film performance based on initial projections widely ranged from a loss of 70% of the initial investment to above 200% return on investment, and thus any single new film investment would pose some risk due to this unpredictability of performance. A lower advance rate for new films, currently approximately 50% of cost, is intended to mitigate this risk. For the seasoned films currently financed by the Credit Facility, a dynamic borrowing base is used to determine a maximum advance rate for debt against an independent third party valuation. The valuations are discounted present values of cash flow projections for international box office revenues, television licensing, DVD sales and other merchandising for each film. While largely contract-based, as macro-economic conditions, among many other factors, change, these projected cash flows remain somewhat exposed to fluctuation. For our detailed analysis of these and other risks, please read further in the Principal Rating Methodology section.

V SCORE AND PARAMETER SENSITIVITY

V Score -The overall V Score for this transaction is Medium. This indicates average structure complexity and uncertainty about critical assumptions. The Medium overall score is driven by a variety of factors. Historic film performance for the sector is available through many securitizations, however the data generally lacks certain relevant information. For this Borrower, the historical data is provided with the necessary detail and their reporting shows film by film level information leading to lower variability for data adequacy compared to its peers. With the separate facility waterfalls within the Credit Facility, the transaction complexity was higher than most transactions while the analytical complexity was average. Finally, the experience and contractual arrangements of the parties involved shows below average variability with the roles of WB and VRPG.

Parameter Sensitivities -- The rating is not model determined but based on a combination of qualitative and quantitative factors. As such, parameter sensitivities cannot be provided. Major risks that could drive negative ratings pressure include: significant decline in projected cash flow as represented by lower valuations; and significant ratings decline of Time Warner, Inc. especially in conjunction with operating weakness at WB.

PRINCIPAL RATING METHODOLOGY

Moody's principal methodology used for rating this Credit Facility can be split into two different parts: (i) structural features and contractual obligations of related parties and (ii) cash flow analysis of the expected cash flow from existing films and profitability of potential new film investments. Together, these items formed the basis for the Credit Facility ratings.

Structural Features and Contractual Obligations

Film rights will be acquired by VRPG (or already have been acquired for existing films) and subsequently transferred to the Borrower. VRPG represents and warrants that no non-permitted liens exist on the international film rights and that this transfer constitutes a true sale of assets to the Borrower. As such, the Borrower will own the legal title to the international distribution rights and a security interest in all proceeds generated from exploitation of these rights.

Structural protections in the transaction include a dynamic borrowing base to limit debt, a minimum equity test, net receipts test, and a minimum production investment credit all of which must be met to fund new film investments. On a qualitative level, the advance rates allowed in this transaction as proposed by the dynamic borrowing base were reviewed and are at levels consistent with the rating for this unique asset. The minimum equity test, net receipts test, and a minimum production investment credit were analyzed in detail using certain static calculations to measure their ability to stop funding in new films. As applied together in the context of this Credit Facility, our analysis found these measures highly effective at limiting exposure to unprofitable new films.

The reliance on WB for this transaction is important in our analysis as they are the main distributor for the co-financed films. Our qualitative analysis focused on their requirements to meet a minimum and maximum release costs to support a film's release as well as their required advance at maturity upon request from the Borrower or the Credit Facility lenders. The levels set for the distributions costs and advance amount required are deemed to be sufficient support for this credit facility at this rating level. Furthermore, the strength of WB's worldwide distribution network also played into our analysis.

VRPG's ability to select profitable films was also a key element as shown by the success of the current film slate. Along with their abilities to distribute in their select regions and abilities as servicer for this transaction, VRPG's overall role in the Credit Facility benefits the transaction.

Finally, when taking into account the structural features and roles of VRPG and WB, the alignment of all parties to the success of the film slate is an important element. Qualitatively, this alignment of interests is a distinct strength for this transaction.

Cash Flow Analysis

The cash flow analysis for this transaction was split into two parts: (i) projected cash flow of existing films in the slate and (ii) expected cash flow for any new films financed. For the projected cash flow of the existing slate, an analysis was conducted using annual historical projections versus collection on a per film basis. Our detailed analysis looked at aggregate trends in collections per film per year and also variability of these projections. On average, each film historically has generated 16% more collections than projected for the actual films in the slate. However annual collections per film have a high degree of variability. Historically from a static data set of projections from 2004, annual collections per film exceeded projections on average by about $570,000 with a wide range from $3.4 mm short of projections to $4.6 mm of exceeding projections. As the advance rate for the Ultimates Facility is limited to 75%, the collections would have to be substantially below the actual collections to incur a loss to this Credit Facility even with large variability in collections per film.

Monte Carlo simulation analysis was conducted to assess the performance of the Credit Facility given new film investments. Future film revenue was projected by sampling film performance data for current film slate using the cost-coverage-ratio (CCR, defined as the undiscounted projected cash flow projections divided by the investment amount) as a proxy. The entire data set of 64 films was reduced by excluding all films with a CCR above 1.2x (only 38 of 62 seasoned films included in this data set). The average CCR for the new data set is approximately 0.8x which implies an undiscounted 20% loss on any new film investment. At an assumed investment rate of one film per quarter, each new film was sampled using the 38 film dataset to determine a CCR as a proxy of the projected cash flows for the new film. During simulation, the cash flow through the waterfall including performance measures was calculated and Credit Facility performance was measured. Additional scenarios were run to haircut all cash flow from new films in amounts of 10% and 20%. That is, all expected cash flow was reduced by this amount for each period for each film sampled. The Monte Carlo simulation results for all scenarios showed the significant strength of the performance measures as the new film investment was quickly stopped allowing for pay down of the Credit Facility in all iterations. Thus our analysis shows little exposure to new unprofitable film investments.

Additional research is available at www.moodys.com.

New York
Michael McDermitt
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Sameer Patel
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns provisional rating to proposed amended Village Roadshow Films (BVI) Limited film finance facility
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.