S&P turns TransUnion outlook to negative

S&P said it revised its outlook for TransUnion to negative from stable and affirmed its ratings, including the BBB- ratings on its loans.

“TransUnion's weaker-than-expected third-quarter performance and fourth-quarter outlook have stalled its deleveraging. After navigating high inflation and rising rates for the past 18 months, the company reported that its credit card origination, personal lending, and marketing activity trends weakened materially in September and into early October. Not only did TransUnion face declines in its financial tech (fintech) and small- to mid-size bank businesses, due to tightening credit conditions, but the pace of the expansion in many of its less-cyclical business lines, such as its Neustar identification verification and fraud mitigation services, insurance, and tenant screening businesses, slowed,” S&P said in a statement.

The agency said it now forecasts TransUnion's S&P Global Ratings-adjusted net leverage will stay at 4.7x in 2023, which is weaker than the 4.2x level it forecasted for year-end 2023 in May.

The negative outlook reflects the heightened risk of a downgrade in the next 12 months if the agency no longer believes it will keep leverage under 4.5x.

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