S&P turns MH Sub I view to negative

S&P said it changed its outlook for MH Sub I LLC (WebMD and Internet Brands) to negative from stable and affirmed all its ratings, including the B senior secured ratings.

“MH Sub's cash flow is pressured by its exposure to rising LIBOR rates. The company has significant exposure to rising interest rates because its capital structure is based on floating-rate debt. As interest expense has increased with higher rates, cash flow has been pressured in 2022 and we believe it will be further pressured as rates continue to rise into 2023 and remain elevated over the next two years.

“All of MH Sub's debt is unhedged, and thus as Libor rises through 2023, the company's cash flow potential will stagnate, even with our expectations of improving EBITDA generation,” S&P said in a press release.

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