S&P revises Canyon to stable

S&P said it revised the outlook on Canyon Cos. Sarl (Cision) to stable from negative and affirmed its B corporate credit rating.

The company plans to use the $325 million capital contribution from its merger with Capitol Acquisition Corp. III to pay down roughly $300 million of its $370 million second-lien term loan.

S&P said the outlook revision is based on its expectation that Canyon will pay down $300 million of its second-lien debt using the $325 million in capital infusion from its merger with Capitol Acquisition.

As a result, the agency forecasts adjusted leverage of 5.8 times to 6 times and free operating cash flow (FOCF) to debt of 6% to 7% in 2017.

These ratios are above the previous upside scenario for the company, where S&P had set a threshold to revise the outlook to stable if adjusted leverage declined below 7 times and FOCF to debt improved to the mid-single-digit percentage area.

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