S&P changes Acuris to negative

S&P said it revised its outlook on Mergermarket Midco 2 Ltd. (Acuris) to negative from stable.

The agency also affirmed the B long-term issuer credit rating on Acuris.

At the same time, the agency affirmed the B issue rating on Acuris' £50 million senior secured revolving credit facility, £228 million first-lien term loan B1 and $200 million term loan B2. The recovery rating is unchanged at 3, reflecting an expectation of meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a default.

S&P also affirmed the CCC+ issue rating on the group's second-lien $106 million facility. The recovery rating is 6, reflecting an expectation of negligible recovery (0%-10%; rounded estimate: 0%).

The agency withdrew the issue and recovery ratings on the former debt facilities issued by Mergermarket USA Inc., which were repaid as part of the refinancing in 2017.

“The outlook revision reflects our forecast of a weakening in free cash flows and credit metrics in 2018, driven by higher interest rates, continued expansionary capital expenditure (capex), lower working capital inflows, and the potential for restructuring and transaction-related charges,” S&P said in a news release.

“Additionally, we anticipate that the group's financial policy is likely to result in continued bolt-on mergers and acquisitions (M&A), which could include funding via additional debt drawings.”

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