AIS HoldCo LLC

The stable outlook reflects S&P Global Ratings' view that Franklin Madison will continue to profitably grow and diversify while maintaining credit protection measures commensurate with the rating. Over the next 12 months, we expect leverage of 5.0x-6.0x with EBITDA margins of 24%-26%. We anticipate higher debt servicing costs will be a headwind to coverage, countered by earnings growth and leverage reduction. We could lower the ratings in the next 12 months if credit metrics deteriorate, including financial leverage to above 7.0x or EBITDA interest coverage to materially below 2.0x on a sustained basis. This could occur if macroeconomic conditions and interest rates worsen beyond base-case expectations or affect Franklin Madison more than envisioned. A downgrade could also occur if the

...AIS HoldCo LLC (d/b/a Franklin Madison) reported top-line growth through the first quarter of 2023. Franklin Madison reported 12.7% revenue growth for the 12 months ended March 31, 2023, and 14.5% for first-quarter 2023. The company's acquisition of SeQuel Response LLC in August 2022 accelerated revenue expansion. SeQuel boosted Franklin Madison's marketing services revenue, although on a pro forma basis incorporating SeQuel into prior-year results, marketing services performance was relatively soft for the first quarter of 2023 due to the timing of campaigns. An additional headwind for first-quarter 2023 was the termination of a key block in the insurance services segment in the second half of 2022, resulting in lower collected premium. The block loss represented the last major client termination risk from a pre-separation period from Affinion. While the termination hurt the top line, the block was a lower-margin business. We expect Franklin Madison to overcome the loss through new sales...

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