Starz Entertainment Corp(US:STRZ)2025-06-26 21:12Cash Flow and Debt Obligations - Starz's cash flow from operations is expected to be significantly dedicated to principal and interest payments, impacting its ability to meet debt obligations [147]. - Starz may face substantial liquidity problems if cash flows and capital resources are insufficient to fund debt service obligations [148]. - Starz's subsidiaries may not be able to make distributions to enable the company to meet its debt obligations [149]. Interest Rate Exposure - A 1% increase in interest rates would decrease the fair value of the 5.5% Senior Notes by approximately $21.2 million [347]. - A quarter point increase in interest rates on the outstanding principal amount of programming notes would result in a $0.2 million increase in annual net interest expense [346]. - Starz's variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 6.51% [346]. - Starz's exposure to interest rate risk is primarily from borrowings under credit facilities, which are expected to be at variable rates [345]. Corporate Indebtedness and Covenants - The agreements governing Starz's corporate indebtedness impose restrictive covenants that limit its operational flexibility [151]. Financial Condition Risks - Changes in tax laws could adversely affect Starz's financial condition and results of operations [155]. - As of March 31, 2025, Starz's 5.5% Senior Notes had an outstanding carrying value of $699.9 million and an estimated fair value of $623.7 million [347].