NEWAsurion Corp.

The stable outlook reflects S&P Global Ratings' expectation that despite the economic slowdown from the COVID-19 pandemic, a material contract loss, and recent credit markets activity, NEWAsurion will maintain its dominant presence in the mobile protection industry and sustain credit protection metrics in line with expectations. In 2021, we expect the slow return to more normalized consumer behavior offset by the Sprint client loss to result in a declining membership base and for revenue to be flat from 2020. EBITDA margins are expected to show some improvement and average 23%-25%, driven by increased Soluto penetration and a one-time payment from Sprint to flash-cut members. S&P Global Ratings-adjusted leverage is forecast between 5.0-5.5x with EBITDA interest coverage exceeding 3.0x. In 2022,

...NEWAsurion Corp.'s recent loss of the Sprint contract elevates client concentration risk and impacts near-term performance. T-Mobile's acquisition of Sprint in 2020 leaves the U.S. with three major wireless providers, Verizon, AT&T, and T-Mobile. Further, with the loss of the Sprint contract to Assurant on a flash-cut basis as of Nov. 1, 2021, NEWAsurion's client-concentration risk has increased. In the near term, while manageable, we believe that this loss will impact the company's top-line and earnings expectations, especially in 2022. But we also think the Sprint contract loss will not be an emerging trend for NEWAsurion since it was rather unique, and the company's leading market position will support growth beyond 2022. Credit metrics expected to remain weak through 2021-2022. In third-quarter 2021, the company tapped the capital markets to fund an equity tender offer worth $3.25 billion as part of its recapitalization strategy of moving from traditional private equity to longer-term...

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