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S&P boosts Vericast
S&P said it raised its ratings on Vericast Corp. to B- from CCC, its first-lien debt to B from CCC+ and its second-lien debt to CCC from CC. The 2 recovery rating on the first-lien debt and 6 recovery rating on the second-lien debt are unchanged.
Vericast sold its print and digital advertising business, operating as Valassis Communications Inc., to RR Donnelley Inc., which will shave $1.2 billion of debt and improve its pro forma leverage and cash flow.
“We forecast Vericast's EBITDA margins will improve to 35% in 2024 from 19% in 2023 before its sale of VCI. Pro forma for the transaction, the company's debt declined by $1.2 billion to $1.7 billion (from $2.9 billion in 2023). We forecast Vericast's S&P Global Ratings-adjusted leverage will improve to 5x by year-end 2024, which is down from the mid-7x area as of Sept. 30, 2023,” the agency said in a press release.
The outlook is stable.
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