New York Post: No Junk in Hef Trunk

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There may be life in the hutch after all. Playboy Enterprises, which went private in 2011, was on the brink of a loan default but was able to pull a bunny out of its hat and revamp a $185 million loan payment.

This past week, Standard & Poor’s rewarded the efforts with an upgrade in a new secured-lending facility — which includes a $10 million revolver due in 2016 as well as the $185 million term loan due in 2017 — with an upgrade of its debt rating to B, one notch higher than the B- it had before the revamp.

The overall corporate credit rating was bumped up to B- from CCC+, removing it from the junk- bond rating.

“We think they will have at least a 15 percent cushion with their EBITDA for the next year,” said Daniel Haines, an analyst who follows Playboy Enterprises for S&P.

The company has been radically changing for several years. It closed its corporate HQ in Chicago last year, and its founder, Hugh Hefner, is now only editor-in-chief of the magazine. Scott Flanders replaced Hef’s daughter Christie as CEO in 2009 and has accelerated changes in recent years.

Its once mighty flagship magazine is a shadow of its former self, losing about $6 million a year domestically, but breaking even on licensing brands from 30 overseas versions. Its soft-core TV network, Spice, was sold to Internet porn giant Manwin.

Flanders had told the Wall Street Journal in February that Playboy “would be well positioned to pursue a public offering at the end of 2014.” He declined to be interviewed for On the Money on whether that was still in the cards. –Keith J. Kelly

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Source: New York Post