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S&P lowers MDC Partners
Standard & Poor's said it lowered MDC Partners Inc.'s corporate credit rating to B from B+, along with the rating on its unsecured debt to B from B+.
The recovery rating of 4 is unchanged, indicating 30% to 50% expected recovery in a default.
The outlook is stable.
With second-quarter results, MDC reiterated its full-year revenue, EBITDA and free cash flow guidance, S&P said.
Despite the expectation of meaningful revenue and EBITDA growth in the second half of 2012, the agency said it expects that leverage could remain well above 4x through at least 2013.
As a result, over the next 12 to 18 months, S&P said it expects to continue to characterize the company's financial risk profile as highly leveraged.
The stable outlook reflects an expectation that MDC will generate positive discretionary cash flow in the second half of 2012, the agency added, and that leverage will begin to decrease as EBITDA rebounds and talent-related spending subsides.
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