S&P: MDC Partners view negative

Standard & Poor's said it revised its outlook on MDC Partners Inc. to negative from stable. The agency also said it affirmed its BB- corporate credit rating, along with the B+ rating on its $65 million add-on to its outstanding 11% senior notes due 2016, with a recovery rating of 5, which indicates an expectation of 10% to 30% recovery for noteholders in the event of a default.

The outlook revision reflects an expectation that fully adjusted leverage will remain above a revised 4.25x threshold at the current rating level in 2010 due to recent debt-financed acquisitions, S&P said.

During the first five months of 2010, the company made numerous acquisitions in the areas of public relations, social media, experiential marketing and data analytics, the agency said.

Although the agency said it believes the acquisitions broaden MDC's offerings, pro forma leverage will remain higher than previous expectations in 2010.

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