Moody’s Investors Service has assigned a Ba2 rating to a new senior secured loan of $1.25 billion for Nielsen Finance LLC, a subsidiary of Nielsen Holdings. That rating is just two notches below investment grade.
The proceeds from the new borrowing, due January 2017, will be used to repay term loans due in 2013. Moody’s noted that its existing ratings for Nielsen, including the Corporate Family Rating (CFR) of Ba3, and all other debt ratings remain unchanged. The outlook is stable.
“Nielsen’s Ba3 CFR reflects our view that the company enjoys strong international business positions with high barriers to entry. In addition, it is based on our expectation that the company can build on its track record to deliver continued solid revenue growth and can thus leverage its cost base, optimized over the last few years, to produce steady profit growth. In addition, we expect that the company will utilize free cash flow generation mainly to reduce debt further. However, the ratings also reflect the company’s still considerable leverage, the price challenges in Nielsen’s `Buy’ division as well as exposure, particularly in the’ Watch’ division to a fast moving technological environment and a more competitive landscape in faster growing markets (eg online),” said Moody’s. The “Watch” division is TV ratings. “Buy” is consumer data.
Moody’s noted that Nielsen has been reducing debt from its IPO early last year and improving EBITDA, resulting in improved cash flow generation.
Credit ratings assignments:
..Issuer: Nielsen Finance LLC
….Senior Secured Bank Credit Facility, Assigned Ba2, 36 – LGD3
Moody’s maintains the following ratings on Nielsen Holdings N.V. and its following affiliates:
Long-Term Corporate Family Ratings (domestic and foreign currency) of Ba3
Probability of Default rating of Ba3
Nielsen Company B.V. (The)
Senior Unsecured (domestic currency) B2, 96 – LGD 6
Senior Unsecured MTN (domestic currency) (P)B2, 96 — LGD 6
Other Short Term (domestic currency) ratings of (P)NP
Nielsen Finance LLC
Senior Secured Bank Credit Facility (domestic and foreign currency) Ba2,
36 – LGD3
BACKED Senior Unsecured (domestic currency) B2, 88 – LGD5