S&P dips Digital Media

S&P said it lowered its ratings for Digital Media Solutions Inc. and the senior secured term loan issued through Digital Media Solutions LLC to CCC+ from B-. About $222 million is outstanding on the loan.

“We view DMS' capital structure as unsustainable absent sustainable increases in its EBITDA and FOCF. We do not expect that the company will significantly improve its credit metrics until 2024. DMS is dependent on improvements in macroeconomic conditions and insurance carrier profitability to support increased ad spending on its platform and additional sales through its independent insurance agents,” the agency said in a press release.

S&P said it forecasts DMS’ S&P Global Ratings-adjusted leverage will be about 10x and estimates it will post negative free operating cash flow in 2023 due to recession-related advertising weakness.

The outlook is negative.

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