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Investing.com -- S&P Global Ratings has revised Eastman Kodak’s outlook to negative while affirming its ’CCC+’ rating, citing heightened refinancing risk as the company faces significant debt maturities in 2026.
The rating agency now assesses Kodak’s liquidity as weak, expecting reduced financial flexibility over the next 12 months. The company has $477 million in term loans, a $50 million cash collateralized letters of credit facility, and $99 million in 4% series B preferred shares all coming due in May 2026.
Kodak plans to use $300 million from its pension (KRIP) proceeds to reduce debt in December 2025, which would leave approximately $175 million in term loans outstanding. The company expects to monetize the remaining $200 million of illiquid assets after the debt maturity date, though the timing remains uncertain.
With about $155 million in unrestricted cash (approximately $85 million held outside the U.S.), Kodak could potentially tap other sources like its $100 million equity sale agreement or convert its series B preferred shares, though S&P views the latter as unlikely.
S&P projects Kodak’s annual free operating cash flow deficit will moderate to about $20 million in 2025 from approximately $100 million for the trailing twelve months ended June 30, 2025. The company has elected payment-in-kind interest on its term loans for up to six quarters, providing temporary relief by reducing annual cash interest outflows by approximately $25-$30 million.
If Kodak receives the expected funds from liquidating pension assets and repaying debt, S&P estimates the company could reduce its adjusted leverage to about 14x in 2025 from over 25x in 2024, with potential to lower it further to about 7.8x by repaying more debt with proceeds from the remaining $200 million of pension assets in 2026.
In August 2025, holders of Kodak’s $125 million 5% Series C preferred stock converted into common equity, reducing immediate refinancing needs.
The rating agency notes that Kodak’s longer-term growth prospects depend on pharmaceuticals and specialty chemicals, as its traditional print and imaging business (over two-thirds of revenue) continues to shrink due to competition from digital alternatives. The company’s Advanced Materials & Chemicals group shows promise with operational EBITDA margins of about 10% compared to negative print margins.
S&P could downgrade Kodak if the risk of a near-term liquidity event increases or if the company pursues a debt refinancing that is considered a distressed exchange. A revision to stable outlook would require the company to repay debt as planned, address near-term maturities at favorable terms, and maintain adequate liquidity.
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