Yellow Maple, Holding Company Of Bureau van Dijk, Affirmed At #B# On Proposed Tap Outlook Stable

Stocks and Financial Services Press Releases Thursday July 14, 2016 16:09
FRANKFURT--14 Jul--S&P Global Ratings

FRANKFURT (S&P Global Ratings) July 14, 2016--S&P Global Ratings said todaythat it has affirmed its 'B' long-term corporate credit rating on Yellow MapleHolding B.V., the ultimate parent of global business publisher Bureau Van DijkElectronic Publishing (BvD). The outlook is stable.

At the same time, we affirmed our 'B' issue rating on BvD's €25 million seniorsecured revolving credit facility (RCF) due 2021 and its €679 millionoutstanding under the senior secured term loan B due 2021, which includes theproposed tap issuance of up to €150 million. The recovery rating is '3',reflecting our expectation of recovery in the lower half of the 50%-70% range.

We also affirmed our 'CCC+' issue rating on the company's proposed second-lienterm loan due March 2022. The recovery rating on this loan is '6', reflectingour expectation of negligible (0%-10%) recovery in the event of default.

Our ratings on BvD reflect our assessments of the company's fair business risk
profile and its highly leveraged financial risk profile.

BvD's fair business risk profile, in our view, reflects the company's strongmarket position as the owner of one of the most complete database for businessinformation of private companies, its broad offering of products, and diverseclient base. The business risk profile also benefits from the company's highprofitability. We positively assess the value of the data aggregation andstandardization that BvD undertakes and its comprehensive data on privatecompanies. BvD boasts strong S&P Global Ratings-adjusted EBITDA margins, andthese factors support our view that BvD will continue to outstrip competitors'margins.

However, our assessment of BvD's business risk profile is constrained by thecompany's relatively small scale as a niche player and its exposure topossible large changes in the competitive landscape. In addition, we continueto assess barriers to entry as relatively low, because the company publishes

publicly available data, and potential competitors can replicate BvD'sbusiness model. We also view switching costs for clients as relatively low.

Our assessment of BvD's financial risk profile continues to be constrained bythe company's high leverage. Our assessment of the company's financial policyremains unchanged at financial sponsor-6 (FS-6), given that the private equitycompany EQT acquired BvD from another private equity fund Charterhouse. Weestimate that the company's credit metrics will stay in our highly leveraged

category over the next two years. We calculate an S&P Global Ratings-adjusteddebt-to-EBITDA ratio of between 7.0x and 7.5x in 2016 following the proposedtap issuance, before dropping below 7.0x in 2017. Our adjusted leverage andcoverage calculations exclude the company's shareholder loans because theinstrument meets our criteria for equity treatment.

Positively, we think that the company's financial risk profile is supported bysound positive free operating cash flows (FOCF) and a projected ratio ofadjusted funds from operations (FFO) to cash interest higher than 2x in 2016.

The stable outlook reflects our view that BvD will sustain positive revenueand EBITDA growth over the next 12 months. We expect that the company willremain highly profitable and generate healthy FOCF. This will translate into adecline of the adjusted debt-to-EBITDA ratio to 7.0x-7.5x in 2016 from 8.0x in2015. Also, our expectation of no material changes in the competitivelandscape further supports the stable outlook on BVD. In addition, we expectthat the company's liquidity will remain adequate.

We could downgrade BvD if the company operationally underperforms ourbase-case projections, including low EBITDA leading to a protracted drop ofadjusted FFO to cash interest coverage to below 2.0x or FOCF turning breakeven or negative. We could also lower the rating if BvD's liquidity weakens

markedly, for example, as a result of a debt-financed shareholderremuneration.

In our view, an upgrade is remote at this stage because of the company's highleverage. However, we could raise the rating by one notch if BvD improves andsustains stronger credit metrics, including S&P Global Ratings-adjusted debtto EBITDA below 5x alongside healthy FOCF and adequate liquidity. That said,any upgrade would hinge on the company's commitment to a more conservative

financial policy.

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