New York, September 14, 2021 -- Moody's Investors Service ("Moody's") placed Neustar, Inc's
(Neustar) B3 corporate family rating ("CFR"), B3-PD
probability of default rating ("PDR"), B2 senior secured
first lien bank facility rating, and Caa2 second lien term loan
rating on review for upgrade. The outlook was revised to rating
under review from negative. The rating action follows the announced
acquisition of the company, excluding Neustar's security business,
by Trans Union, LLC ("TransUnion", Ba2,
Stable) in a $3.1 billion cash transaction that is subject
to regulatory approvals and expected to close by the end of 2021.[1]
RATINGS RATIONALE/ FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE
OF THE RATINGS
The rating review reflects Moody's anticipation that, following
the close of the acquisition by TransUnion, Neustar's rated
debt will be repaid and its ratings withdrawn.
The ratings could be upgraded if Neustar generates healthy revenue growth
and profitability while adhering to a conservative financial policy such
that debt/EBITDA (Moody's adjusted) is sustained below 6.0x (below
7x when expensing capitalized software costs), and annual free cash
flow to debt exceeds 5%. However, the ratings could
be downgraded if Neustar were to experience weakening operating performance
including declining profitability and ongoing material free cash flow
deficits, heightened refinancing risk, or the company maintains
aggressive financial policies that meaningfully constrain financial flexibility.
On Review for Upgrade:
..Issuer: Neustar, Inc
.... Corporate Family Rating, Placed
on Review for Upgrade, currently B3
.... Probability of Default Rating,
Placed on Review for Upgrade, currently B3-PD
....Senior Secured First Lien Bank Credit
Facility, Placed on Review for Upgrade, currently B2 (LGD3)
....Senior Secured Second Lien Term Loan,
Placed on Review for Upgrade, currently Caa2 (LGD5)
Outlook Actions:
..Issuer: Neustar, Inc
....Outlook, Changed To Rating Under
Review From Negative
The principal methodology used in these ratings was Business and Consumer
Service Industry published in October 2016 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1037985.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Neustar, acquired by Golden Gate and GIC in 2017 through a leveraged
buyout, is a leading global provider of real-time information
services and analytics that enable clients to make actionable, data-driven
decisions for applications including marketing, contact center fraud
detection, caller ID services, and data security. Moody's
forecasts that the company will generate pro forma sales of approximately
$655 million in 2021.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288435
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the UK and is endorsed
by Moody's Investors Service Limited, One Canada Square,
Canary Wharf, London E14 5FA under the law applicable to credit
rating agencies in the UK. Further information on the UK endorsement
status and on the Moody's office that issued the credit rating is
available on www.moodys.com.
REFERENCES/CITATIONS
[1] Form 8-K (SEC) 13-Sep-2021
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Lee Zeltser
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Karen Nickerson
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653