S&P rates Consensus Cloud notes B+

S&P said it assigned a B+ issuer credit rating to Consensus Cloud Solutions Inc. and a B+ issue-level rating and 3 recovery rating to its proposed senior notes due 2026 and 2028. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default.

The outlook is stable.

J2 Global Inc. is planning to spin off its cloud services business into a stand-alone company named Consensus Cloud Solutions. Consensus has proposed issuing $800 million of senior notes due 2026 and 2028 to complete the transaction.

“Given its proposed capital structure, we expect pro forma S&P Global Ratings-adjusted leverage to be initially in the mid-4x area, improving towards the low 4x area by year-end 2022,” S&P said in a news release.

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