Parent of German Car Classified Ad Platforms AutoScout24, Speedster Bidco GmbH, Assigned 'B-' Rating; Outlook Stable

Private equity firm Hellman&Friedman (H&F) completed its acquisition of 100% of AutoScout24 (AS24), an operator of online car classifieds platforms, from Scout24 AG. H&F funded the acquisition with €1.9 billion equity and raised €1.1 billion of new debt via Speedster Bidco GmbH. We are assigning a 'B-' long-term issuer credit rating to AS24's parent company, Speedster Bidco GmbH. At the same time, we are assigning our 'B-' issue rating and '3(60%)' recovery rating to the company's first-lien facilities and our 'CCC' issue rating and '6(0%)' recovery rating to the company's second-lien term loan. The stable outlook reflects our view that AS24's leverage will stay elevated in 2020 amid increased uncertainty around the impact from the COVID-19 pandemic on

...calculations. In addition, there are shareholder loans (SHLs), most of which we view as debt-like obligations and include in our debt and credit ratio calculations. We anticipate that S&P Global Ratings-adjusted debt to EBITDA will be elevated in 2020, and exceed our initial expectation. We forecast leverage above 12x in 2020, exceeding our initial expectation of 8.7x-9.2x (excluding SHLs and 12 months of pro-forma performance contribution of AS24 and FinanceScout24 [FS24]) outlined in our February 2020 publication. AS24's deleveraging path will include mainly absolute growth of EBITDA starting from 2021, as we believe that 2020 EBITDA will be negatively affected by the COVID-19 pandemic. Nevertheless, we believe that the subscription-based, asset-light business model should support the company's operating performance and a sound recovery after the virus is contained. We think positive FOCF generation, supported by EBITDA, should result in S&P Global Ratings-adjusted debt to EBITDA improving...

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