The stable outlook reflects our expectation for Blackhawk Network Holdings Inc. to continue to grow despite secular headwinds in the broader U.S. retail sector, to execute on its planned cost savings, and to maintain leverage at under 7.5x over the next 12 months. We could lower the rating if competition with Blackhawk's distribution partners continues to pressure distribution expenses and profitability, or if additional debt-funded acquisitions lead to adjusted leverage remaining elevated above 7.5x. We could consider a higher rating if the company continues to gain significant scale and diversification through growth in businesses outside of the physical retail gift-card market. We would also look for a commitment from the company to sustain leverage of less than 5x. E—Estimate. U.S.
