Playboy Enterprises is seeking to refinance debt, remove covenants and loosen other restrictions two years after the men’s magazine publisher was taken private in a buyout led by founder Hugh Hefner.
Playboy is seeking a $185 million loan that eliminates a requirement that it generates a minimum amount of earnings before interest, tax, depreciation and amortization, according to a report yesterday from Standard & Poor’s.
Standard & Poor’s said last month that Playboy was in jeopardy of breaching loan covenants.
“Following the proposed transaction, the company likely would have adequate headroom with covenants and the capacity to maintain sufficient liquidity over the next couple of years, barring an unanticipated significant deterioration of performance,” S&P analysts wrote in yesterday’s report.
The ratings firm cut Playboy’s grade one level to CCC+ last month, saying it may violate its minimum Ebitda (earnings before interest, taxation, depreciation and amortization) test for the year ending June 30 under the existing loan.
Molly Battles, a spokeswoman for Playboy, didn’t immediately return a telephone call or respond to an e-mail seeking comment.
A partnership owned by Hefner and private-equity firm Rizvi Traverse Management LLC took Playboy private in March 2011.