Post by
sorrenson on Jul 16, 2024 12:00pm
CIBC dropping coverage
As of July 15, 2024, we are dropping coverage of Corus Entertainment due to material uncertainty about the company’s equity value. Management commentary reflects that Corus will likely be in breach of its debt covenants when the total debt to cash flow leverage covenant decreases from 4.50x to 4.25x on September 1. Corus has over $1B of debt outstanding with material amounts due in 2027 and 2028, and we do not expect the business to generate enough cash to repay the initial maturity in 2027. Top-line softness has pressured FCF, and we do not expect Corus will be able to meet its debt covenants or repay its debt without relief/restructuring. Effective with this note, our estimates, rating and price target for the company are discontinued and should not be relied upon going forward.