S&P cuts Shutterfly facilities, rates loan BB-

S&P said it affirmed its BB- rating on Shutterfly Inc. and removed the ratings from CreditWatch, where they were placed with negative implications on Jan. 31.

The outlook is stable.

At the same time, the agency lowered the issue-level rating on the company's existing senior secured credit facilities to BB- from BB+ and revised the recovery rating to 3 from 1.

In addition, S&P assigned a BB- issue-level rating and 3 recovery rating to the company's $825 million senior secured term loan B-2 due 2024.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 65%) recovery of principal in the event of a payment default.

The agency said it expects Shutterfly to complete its acquisition of Lifetouch Inc. in the second quarter of 2018.

“The Lifetouch acquisition improves Shutterfly's operating scale and product diversification, provides the opportunity to cost-effectively cross-sell products to millions of highly qualified Lifetouch customers and allows Shutterfly to leverage its combined technology and manufacturing scale to improve its operating performance and efficiency,” S&P said in a news release.

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