Moody’s Investors Service Inc. has downgraded Beverly Hills-based William Morris Endeavor Entertainment’s new term loan further in the junk bond range.

Talent agency WMEE is a subsidiary of WME IMG, itself a subsidiary of Endeavor Operating Co., also based in Beverly Hills.

Moody’s downgraded WMEE’s senior secured first lien term loan to B3 from B2. It made no changes to WME IMG’s B3 corporate rating, its B3 rating for WME IMG’s first lien credit facility or to its negative outlook for WME IMG.

The downgrade for privately held WMEE, “reflects the impact of the coronavirus outbreak on the ability to hold live events and complete entertainment production as scheduled, as well as on the overall economy, which will lead to lower discretionary consumer spending,” Moody’s analysts Scott Van den Bosch and Stephen Sohn wrote in a May 13 report.

The analysts also cited “WME IMG’s already very high pro forma leverage level of approximately 7.8x as of Q4 2019 (which) will increase materially in the near term while liquidity will deteriorate as long as the coronavirus limits the ability to hold scheduled events.”

WME IMG is highly leveraged, having historically used debt aggressively to fund acquisitions, including an interest in the Ultimate Fighting Championship and purchasing the Miss Universe Organization.

In January, the company reportedly paid $660 million for a stake in On Location Experiences, a hospitality company that produces fan and corporate experiences around sports, music, fashion and entertainment events such as the Bud Light Super Bowl Music Fest, as well as tickets and travel for National Football League games abroad.

And “we’re not done collecting,” companies, Endeavor President Mark Shapiro recently told The Hollywood Reporter.

“A governance consideration that Moody’s considers in WME IMG’s credit profile is its aggressive financial policy,” Van den Bosch and Sohn wrote.