S&P turns Digital Media view to negative

S&P said it revised its outlook for Digital Media Solutions Inc. to negative from stable but affirmed all its ratings, including the B ratings on its bank loans borrowed through Digital Media Solutions LLC.

The agency noted the company’s guidance for EBITDA and revenue for 2022 was weaker than expected on lower advertising bid prices from its auto insurance clients and climbing media and staffing costs because of inflationary pressures.

“The negative outlook reflects the potential for a lower rating if leverage remains above 6x and FOCF to debt remains below 5% over the next year. This could stem from earnings and inflationary pressures limiting the company's ability to deleverage significantly from 7x as of Dec. 31, 2021,” the agency said in a press release.

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