Getty Images Downgraded to CCC After Missed Interest

Rating Action

S&P Global Ratings downgraded Getty Images Inc. (NYSE:GETY) to a ‘CCC’ issuer rating from ‘CCC+’ and placed all of its ratings on CreditWatch with negative implications after the company missed the scheduled interest payment on its senior unsecured notes. The agency also lowered the issue‑level ratings, moving the senior secured debt to ‘CCC+’ from ‘B‑’ and the senior unsecured debt to ‘CCC’ from ‘CCC+’. S&P indicated uncertainty about whether Getty Images will make the payment within the permitted 30‑day grace period, warning that failure to do so would trigger an event of default under the indenture and could lead to an issuer rating of ‘SD’ and issue‑level ratings of ‘D’.

Financial Position

Getty Images reported approximately $51 million of cash on its balance sheet at the end of the second quarter and had $30 million of availability under its revolving credit facility. The company drew the remaining $30 million on the facility following the quarter, effectively utilizing the full amount of the revolving line.

Litigation and Credit Facility

In July, Getty Images was subject to a litigation judgment totaling about $92.3 million, including interest. In August, the company made a partial payment of roughly $4.1 million in accordance with a standstill agreement related to that judgment. The revolving credit facility contains a springing maturity provision that activates 180 days before the maturity of the term loan or senior notes if more than $100 million of principal remains outstanding. The senior unsecured notes mature on 1 March 2028; if the principal is not reduced, the revolving credit facility’s maturity would spring to 2 September 2027.

Outlook

S&P stated that it expects to resolve the CreditWatch placement as it receives additional information regarding Getty Images’ strategic financing alternatives and balance‑sheet management initiatives. The agency emphasized that failure to make the missed interest payment within the 30‑day grace period would result in a further downgrade to ‘SD’ for the issuer and a ‘D’ rating for the affected issues.