TEXT-S&P revises Bankrate rating to '3'

Overview
-- We have updated our recovery analysis for U.S. ad-supported personal
financial information services and aggregate rate financial data provider
Bankrate.
-- We are revising our recovery rating on the senior secured debt to '3'
from '4' based on an increased estimated enterprise value at default,
reflecting better operating performance and recent acquisitions.
-- At the same time, we are affirming our 'BB-' corporate credit rating
and the issue-level ratings on the company.
-- The stable rating outlook reflects our expectation that Bankrate will
experience healthy growth over the medium term and that acquisitions could
increase debt leverage somewhat

Rating Action
On June 25, 2012, Standard & Poor's Ratings Services revised its recovery
rating on North Palm Beach, Fla.-based Bankrate Inc.'s secured debt
upward to '3' from '4'. The '3' recovery rating indicates our expectation of
meaningful (50%-70%) recovery prospects in the event of a default.

We also affirmed our 'BB-' corporate credit rating on Bankrate. The outlook is
stable.

In addition, we affirmed our 'BB+' issue-level rating on the company's $30
million super-priority revolver credit facility and our 'BB-' issue-level
rating on its senior secured notes and senior secured revolving credit
facility. The recovery rating on the tranche A debt is '1', indicating
expectations for very high (90%-100%) of recovery in the event of payment
default.

Rationale
The rating on Bankrate reflects our expectation that leverage will remain
moderate as the company continues to benefit from the growth in online
advertising. We consider the company's business risk profile "fair" (based on
our criteria), reflecting its exposure to the financial services industry, the
highly competitive online advertising market, and its acquisition-oriented
growth strategy, while also weighing its strong EBITDA margin. We view
Bankrate's financial risk profile as "significant," with the potential for
debt-financed acquisitions and shareholder-favoring transactions tempering the
benefit of moderate debt leverage.

Bankrate offers ad-supported personal financial information services and
aggregates rate data for more than 300 financial products from roughly 4,800
institutions. It generates revenue primary through lead generation advertising
and hyperlink (cost per click) advertising, both of which pay based on
performance, and display advertising. The customer base is diverse, although
advertisers are mainly financial institutions, subject to prevailing economic
conditions. Like most Internet companies, Bankrate depends on search engines
for a substantial portion of its Internet traffic. Significant changes to
search engine algorithms could hurt the volume of traffic reaching Bankrate
Web sites. Still, it has benefited from changes that reward sites with higher
quality content. Bankrate will have to maintain the relevance of its content
to Internet users to ensure steady streams of Internet traffic.

Bankrate has been a very active acquirer. Recent acquisitions expanded its
presence in the insurance and credit card verticals. We believe
insurance-related business is generally less cyclical than some of its other
financial products, and provides a large growth opportunity for the company.
Bankrate can use its company-owned Web sites and editorial and media
relationships to drive traffic to acquired sites. The credit card segment is
the only one in which Bankrate receives compensation based on its clients'
conversion of leads to an approved application; it is therefore vulnerable to
lower credit card approval levels.

Our base-case 2012 scenario assumes low- to mid-teen percentage organic
revenue growth, with total revenue growth of over 20% on the benefit from the
InsWeb acquisition. We believe the EBITDA margin will be around 30% in 2012,
leading to EBITDA growth of 20% or more, as the integration of the lower
margin InsWeb business and increased marketing spending offset higher gross
margins reflecting increased organic revenue. In 2013, we expect revenue
growth of 10% or more and mid- to high-teen percentage EBITDA growth.

For the first quarter of 2012, Bankrate's revenue and EBITDA increased 26% and
23%, respectively, year over year, with growth from all products. For the 12
months ended Sept. 30, 2011, the adjusted EBITDA margin was 29.8%, slightly
lower than levels from one year earlier on increased marketing expenses.

Under our base-case scenario for 2012, lease-adjusted leverage will fall to
1.3x and lease-adjusted coverage of interest will increase to around 7.0x,
mainly through EBITDA growth. In 2013, we expect adjusted leverage to decrease
to 1.1x and adjust interest coverage to rise to 8.0x or more. Lease-adjusted
debt leverage was 1.4x for the 12 months ended March 31, 2012, from EBITDA
growth and the repayment of $105 million of debt with proceeds from Bankrate's
IPO in the second quarter of last year. Leverage is below the indicative
significant financial risk threshold of 3x to 4x adjusted debt to EBITDA, but
we expect leverage could drift higher, given Bankrate's appetite for
acquisitions and the potential for returns to shareholders. Lease-adjusted
coverage of interest was 4.8x for the year ended March 31. Conversion of
adjusted EBITDA to discretionary cash flow was about 40% during the 12 months
ended March 31, 2012, on expenses related to the IPO. In 2012 and 2013, we
expect the conversion rate to improve to around 60% on higher EBITDA and the
absence of one-time charges.

Liquidity
In our view, Bankrate has "strong" liquidity to cover its needs over the next
12 to 18 months, including interest payments and ongoing operating needs. Our
view of the company's liquidity profile incorporates the following
expectations and assumptions:
-- We expect sources of liquidity to exceed uses by more than 1.5x over
the next 12 months.
-- We also expect cash sources to continue exceeding cash uses, even if
EBITDA declines 30%.
-- We expect Bankrate could maintain financial covenant compliance, even
with a 30% EBITDA decline.
-- We believe it would be able to absorb high-impact, low-probability
events.
-- We also believe Bankrate has a satisfactory standing in the credit
markets.

Sources of liquidity include cash balances of $64.5 million, full availability
under its $100 million revolving credit facility, and expected discretionary
cash flow of $90 million or more in 2012 and over $100 million in 2013.
Capital spending requirements are modest and Bankrate has no debt maturities
until 2015.

Bankrate is currently subject to a maximum leverage covenant of 4.25x on its
revolving credit facilities. As of March 31, 2012, it had covenant headroom of
almost 70% with this covenant. The covenant does not step down and we expect
headroom under the covenant to increase in the future.

Recovery analysis
See Standard & Poor's recovery report on Bankrate, to be published following
the release of this report on RatingsDirect.

Outlook
Our stable outlook reflects our expectation that Bankrate will experience
healthy growth over the medium term and that acquisitions could increase debt
leverage somewhat. We could lower the rating if operating performance
deteriorates, likely in conjunction with increasing competition. We could
consider an upgrade over the longer term if the company can expand its revenue
base and maintain its good competitive position, high profitability, and
moderate debt leverage.

Related Criteria And Research
-- Methodology And Assumptions: Liquidity Descriptors For Global
Corporate Issuers, Sept. 28, 2011
-- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009
-- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

Ratings List

Ratings Affirmed

Bankrate Inc.
Corporate Credit Rating BB-/Stable/--
Senior Secured tranche A BB+
Recovery Rating 1

Ratings Affirmed; Recovery Rating Revised

Bankrate Inc.
To From
Senior Secured tranche B & 11.75% nts BB- BB-
Recovery Rating 3 4