S&P cuts Dun & Bradstreet, rates loans B-, notes B-, CCC

S&P said it lowered its issuer-credit rating on Dun & Bradstreet Corp. to B- from BB+ to reflect the significant leverage increase and meaningful near-term turnaround execution risks and removed the issuer-credit rating from CreditWatch.

S&P also assigned a B- issue-level rating and 3 recovery rating to the company's proposed senior secured debt, comprising a $400 million revolving credit facility, a $2.63 billion term loan and $500 million senior secured notes.

S&P assigned a CCC issue-level rating and 6 recovery rating to the proposed $850 million senior unsecured notes.

The debt is being issued out of Star Merger Sub, Inc. to fund the LBO, which upon consummation of the LBO will merge with and into D&B, with D&B continuing as the surviving corporation.

The BB+ issue-level rating on the company's existing senior unsecured debt, which S&P expects will be repaid using the LBO financing proceeds, is unchanged and remains on CreditWatch with negative implications.

The outlook is stable.

Dun & Bradstreet has announced plans to issue over $4 billion in debt to fund its leveraged buyout, valued at approximately $7.2 billion, by an investor group led by CC Capital, Cannae Holdings, Bilcar LLC, Black Knight Inc. and funds affiliated with Thomas H. Lee Partners LP. S&P estimates pro forma leverage will rise above 10x from 3.1x as of Sept. 31, 2018, and remain around 10x over the next two years as the company invests in its reorganization.

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