S&P gives B to Ancestry loan

Standard & Poor’s said it affirmed its B corporate credit rating on Ancestry.com Holdings LLC. The outlook remains stable.

At the same time, S&P affirmed its CCC+ issue-level and 6 recovery ratings on the company’s $300 million senior unsecured notes due 2020. The 6 recovery rating indicates an expectation for negligible recovery (0%-10%) of principal in the event of a payment default.

S&P also assigned B issue-level and 3 recovery ratings to Ancestry.com’s proposed first-lien secured credit facility, which consists of a $100 million revolving credit facility due 2020 and a $735 million term loan due 2022. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; upper half of the range) of principal in the event of a payment default.

“The B corporate credit rating reflects Ancestry.com’s ‘aggressive’ financial policy and narrow business focus,” said S&P credit analyst Elton Cerda in a news release. “We view the company’s business risk profile as ‘weak’ due to its reliance on one website for most of its revenue and EBITDA, and its need to replenish its customer base. These weaknesses are partially offset by the company’s leading market position in this niche market and its solid EBITDA margin.

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