S&P slices System1

S&P said it downgraded its ratings on System1 Inc. and its financing unit Orchid Merger Sub II LLC, to CCC from B-. The agency also lowered its issue-level rating on Orchid Merger's senior secured term loan to CCC from B-.

“We expect System1's operating and financial performance will remain challenged for the rest of 2023 as advertisers continue to cut spending as elevated inflation and interest rates eat away at consumers' purchasing power. If performance continues to stagnate without recovering in the second half of 2023, we view it unlikely the company will be able to meet its financial obligations,” S&P said in a press release.

The outlook is negative.

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