S&P gives BB+ to Shutterfly loans

S&P said it assigned its BB- corporate credit rating to Shutterfly Inc. The outlook is stable.

At the same time, S&P assigned a BB+ issue-level rating and 1 recovery rating to the company's $500 million senior secured credit facility.

The facility consists of a $200 million revolving credit facility due in 2022 and a $300 million term loan B due 2024. The 1 recovery rating indicates an expectation for very high (90%-100%; rounded estimate: 95%) recovery of principal in the event of a payment default.

“The corporate credit rating reflects Shutterfly's good market position and brand recognition in premium personalized photo products and services; high industry fragmentation, price competition and intense competition from existing and new entrants; significant revenue seasonality with over 50% of revenue generated in the year-end holiday season; good profitability with EBITDA margins in the high-teens percent; and conservative financial policy with expected leverage in the low 2x area in 2018,” S&P said in a news release.

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