AIS HoldCo LLC

In addition to its revolver, Franklin Madison has a first-lien and second-lien term loan, both of which are priced off of LIBOR. With increasing interest rates and neither hedges nor interest rate caps in place, we anticipate higher debt servicing costs to pressure EBITDA interest coverage. In the 12 months ended Sept. 30, 2022, coverage was modestly above 2.0x, and we expect it to be around 2.0x over the next 12 months. The stable outlook reflects our view that Franklin Madison will continue to profitably grow and diversify, while maintaining credit protection measures commensurate with the current rating. We expect leverage to improve, but remain above 5.0x, with growth from product expansion, favorable momentum in new clients and business, growth

...The company's marketing and infrastructure investments are benefiting the top line. AIS HoldCo LLC (d/b/a Franklin Madison) has experienced growth in collected premiums since late 2020, profiting from greater mail volumes, improved efficiency, and expansion of digital channels. Despite some unfavorability in the third quarter due to an expected client termination, collected premiums in the 12 months ended Sept. 30, 2022, still increased incrementally relative to the same period last year. Since its carveout from Affinion by financial sponsor Mill Point Capital in 2018, Franklin Madison has expanded marketing volumes that were previously capped as well as built out and upgraded digital and infrastructure capabilities. The company expects to complete the last portion of modernization and transition off of legacy Affinion platforms by the end of 2022. Throughout 2022 Franklin Madison launched new platforms, including one for email marketing deployment, and a customer service portal to enhance...

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