TEXT-S&P puts Nielsen Holdings 'BB' rating on watch negative

Tue Dec 18, 2012 1:05pm EST

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Overview
     -- U.S.-based global information and measurement company Nielsen Holding 
N.V. has entered into a definitive agreement to acquire Columbia,
Md.-based Arbitron Inc. 
     -- We expect that Nielsen's adjusted debt leverage will rise to slightly 
above 5x pro forma for the transaction.
     -- We are placing our 'BB' corporate credit rating for Nielsen on 
CreditWatch with negative implications.
     -- The CreditWatch listing reflects the increased leverage and our 
uncertainty that the company will be able to reduce leverage back below 5x in 
the next year.

Rating Action
On Dec. 18, 2012, Standard & Poor's Ratings Services placed its ratings on 
U.S.-based global information and measurement company Nielsen Holding N.V. on 
CreditWatch with negative implications. This includes the 'BB' corporate 
credit rating on both Nielsen and wholly owned subsidiary The Nielsen Co. 
B.V., as well as all issue-level ratings on the company's debt.

Rationale
This action follows the company's announcement that it has entered into a 
definitive agreement to acquire Columbia, Md.-based Arbitron Inc. for about 
$1.3 billion in cash. The move sets back the company's progress of the last 
two years toward lower leverage. We also view the acquisition as consuming 
significant financial resources without furthering the development of, and 
position in, Internet audience measurement. Instead, the transaction increases 
the company's exposure to traditional media (radio and television). We view 
radio, in particular, as under long-term structural pressure that we think 
could hamper Nielsen's ability to obtain rate increases on its services. 
Adjusted leverage will rise to slightly over 5x on a pro forma basis based on 
Sept 30, 2012 financials if the transaction is fully funded with debt, as we 
anticipate.

CreditWatch
We will resolve the CreditWatch listing after evaluating the company's future 
capital allocation plan, specifically its ability to reduce leverage to below 
5x on a sustained basis. If leverage were to remain above 5x, we would likely 
lower the rating by one notch, to 'BB-'.


Related Criteria And Research
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Standard & Poor's Revises Its Approach To Rating Speculative-Grade 
Credits, May 13, 2008
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008


Ratings List

CreditWatch Action
                           To                 From
Nielsen Holdings N.V.
 Corporate Credit Rating   BB/Watch Neg/--    BB/Stable/--
 Subordinated*             B+/Watch Neg       B+
   Recovery Rating         6                  6

The Nielsen Co. B.V.
 Corporate Credit Rating   BB/Watch Neg/--    BB/Stable/--
 Senior Unsecured          B+/Watch Neg       B+
   Recovery Rating*        6                  6

Nielsen Finance Co.
 Senior Secured            BBB-/Watch Neg     BBB-
   Recovery Rating*        1                  1
 Senior Unsecured          BB-/Watch Neg      BB-
   Recovery Rating*        5                  5

Nielsen Finance LLC
 Senior Secured            BBB-/Watch Neg     BBB-
   Recovery Rating*        1                  1
 Senior Unsecured          BB-/Watch Neg      BB-
   Recovery Rating*        5                  5

*Standard & Poor's does not place its recovery ratings on CreditWatch; 
however, this does not preclude our recovery assessment from potentially 
changing in the future.
 

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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