S&P rates Gartner loan BB+

S&P said it assigned its BB corporate credit rating to Gartner Inc. The outlook is stable.

At the same time, S&P assigned a BB+ issue-level rating and 2 recovery rating to the company's $975 million senior secured term loan B due 2024. The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 75%) recovery of principal in the event of a payment default.

“The corporate credit rating incorporates our expectation that Gartner will integrate CEB Inc. and realize various synergies over the next two years,” said S&P credit analyst Elton Cerda in a news release. “Additionally, the rating incorporates our view that Gartner will use most of its domestic generated free operating cash flow (FOCF) to repay debt while suspending share repurchases and large acquisitions until it returns to its target leverage of 2x-3x.”

In addition to the term loan B borrowings, the company plans to pursue additional borrowings, including a $400 million senior secured term loan A, a $300 million 364-day senior unsecured bridge facility, and a senior unsecured high-yield bridge facility of up to $600 million, to finance the acquisition and repay certain of CEB's debt.

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