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S&P upgrades Affinion
Standard & Poor's said it raised the long-term corporate credit rating on Affinion Group Holdings Inc. to CCC+ from SD (selective default).
The outlook is negative.
In addition, S&P said it raised the ratings on Affinion's 11 5/8% senior notes due 2015 and Affinion Group Inc.'s 11½% senior subordinated notes due 2015 to CCC- from D. The recovery rating on this debt is 6, indicating an expectation for negligible recovery in a default, the agency said.
S&P also said it affirmed the ratings on Affinion Group's senior secured credit facility and 7 7/8% senior notes due 2018, which were not affected by the exchange. Those ratings were removed them from CreditWatch with negative implications.
The recovery rating on the company's credit facility remains 2, indicating an expectation for satisfactory recovery in a default. The recovery rating on the company's 7 7/8% senior notes remains at 6, indicating an expectation for negligible recovery in a default.
Lastly, the agency also said it assigned CCC- ratings on the 13½% notes due 2018 issued by newly created holding company Affinion Investments LLC and Affinion Group's new 14½% pay-in-kind notes due 2018. The notes also were assigned a recovery rating of 6, indicating an expectation for negligible recovery in a default.
The upgrade reflects the completion of the selective default. About $292.8 million of the existing holding company notes and about $352.9 million of the existing operating company notes were tendered in the exchange offers, said Elton Cerda, an S&P analyst.
About $32.2 million of the existing holding company notes and $2.6 million of the existing operating company notes remain outstanding, Cerda said in a press release.
The negative outlook reflects an expectation for weak operating performance and a view that the capital structure is unsustainable absent a turnaround in operating performance, the analyst said.
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