OREANDA-NEWS. S&P Global Ratings today raised its issue-level rating on Sterling, Va.-based U. S. diversified telecommunications services provider Neustar Inc.'s senior secured credit facility to 'BB+' from 'BB' and revised the recovery rating to '1' from '2' following the amendment and extension of the facility. The '1' recovery rating indicates our expectation for very high recovery (90%-100%) of principal in the event of a payment default.

The amended credit facility consists of a $200 million revolver ($175 million drawn at closing) extended to 2019 from 2018 and an add-on of $300 million to the existing $199 million outstanding term loan A for a new amount of $499 million. The maturity on the term loan A is extended to 2019 from 2018. The revised recovery rating on the amended credit facility reflects higher amortization on the new term loan A of 22% per annum through 2017, and 10% thereafter. As a result, we expect a lower amount of secured debt outstanding at the time of default under our recovery analysis.

We are also raising our issue-level rating on the company's existing $300 million 4.50% senior unsecured notes due 2023 to 'B+' from 'B' and revising the recovery rating on this debt to '5' from '6'. The '5' recovery rating indicates our expectation for modest recovery (10%-30%; lower half of the range) of principal in the event of a payment default. The revised recovery rating reflects a lower amount of secured debt ahead of the existing unsecured notes following the transaction.

Our 'BB-' corporate credit rating and all issue-level ratings remain on CreditWatch with negative implications following the company's June 2016 announcement that it intends to separate into two independent publicly traded companies in a tax-free spin-off.

We anticipate resolving the CreditWatch following additional information being provided by the company such as, required approvals, Neustar's subsequent capital structure, and its ongoing financial policy.