S&P revises MDC Partners to stable

S&P said that it revised the outlook on MDC Partners Inc. to stable from positive and affirmed its B+ corporate credit rating.

At the same time, the agency affirmed its B+ issue-level rating on the company's senior unsecured notes. The 4 recovery rating is unchanged, indicating an expectation for average recovery (30%-50%; upper half of the range) of principal in the event of a payment default.

"The outlook revision reflects MDC Partners' weaker-than-expected first-half 2016 results," S&P credit analyst Dylan Singh said in a news release.

"The company reported EBITDA growth was lower than we expect, mainly due to the delays in the onboarding of its new business wins from the first half of the year."

These delays also lowered MDC Partners' cash flows, necessitating a draw on its revolver and the use of the proceeds from its March 2016 term loan refinancing to finance its working capital use rather than to lower its deferred acquisition costs (DAC) balance, which S&P expected, the agency said.

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