S&P rates Gartner notes BB-

S&P said it assigned a BB- issue-level rating and 5 recovery rating to Gartner Inc.'s proposed dollar-denominated senior unsecured notes due 2025. The 5 recovery rating indicates an expectation for modest recovery (10%-30%; rounded estimate: 15%) of principal in the event of a payment default.

The company will use the net the proceeds, cash on hand and borrowings under its amended senior secured credit facility and certain new credit facilities to fund the cash consideration and other amounts payable regarding its previously announced acquisition of CEB Inc., repay and redeem certain of CEB and its subsidiaries' outstanding debt, and pay related fees and expenses.

The issue-level rating is one notch below Gartner’s corporate credit rating.

Pro forma for the transaction, S&P said it expect that Garner's leverage will be around 5 times as of Dec. 31, 2016. The agency views Gartner's financial risk profile as significant, primarily due to the company's strong pro forma free operating cash flow (FOCF) generation and FOCF to debt of about 13% as of Dec. 31, 2016.

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