S&P assigns Match loan BBB-, notes BB

S&P said it assigned a BBB- issue-level rating and 1 recovery rating to Match Group Inc.’s proposed $425 million term loan B due 2027. The agency expects to withdraw ratings on the existing $425 million term loan upon close of this transaction. S&P also assigned a BB issue-level rating and 3 recovery rating to Match’s proposed $500 million of senior notes, the same as its existing senior unsecured notes. Note proceeds along with cash on the balance sheet will be used to fund a distribution to IAC. Additionally, Match will assume all of the exchangeable debt at IAC as part of the separation agreement.

S&P affirmed Match’s BB rating and removed all its ratings (including issue-level ratings) from CreditWatch with negative implications, where they were placed on Dec. 20.

S&P said it revised the outlook for Match to negative, which reflects the risk the company would be unable to lower leverage below 4x in line with the agency’s expectations, possibly due to unexpected operating challenges, such as increased competition from other dating services, or operating missteps that cause its revenue growth to slow or costs to increase (likely due to higher-than-expected litigation costs) above expectation.

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