S&P pumps up Magnite

S&P said it upgraded Magnite Inc.’s issuer rating to BB- from B+ and the rating on its first-lien credit facility to BB from BB-. The recovery rating on this debt remains 2.

Magnite lowered its S&P Global Ratings-adjusted leverage to 3.5x in 2023 from 4.5x in 2022, by repaying its convertible notes and lopping off $200 million in total adjusted debt over the last 12 months, the agency noted.

“We expect Magnite's adjusted leverage to be about 3.2x while FOCF to debt remains above 10% in 2024. We expect EBITDA margin improvement of about 100 bps coupled with revenue growth of about 10% from a recovering advertising environment in 2024 to result in adjusted leverage of about 3.2x and for FOCF to debt to remain above 10% for the year. In addition, we believe the company's large cash balances allow it to pursue shareholder returns or acquisitions while maintaining adjusted leverage below 4x on a sustained basis,” S&P said in a press release.

The outlook is stable.

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