S&P puts Interpublic on positive watch

Standard & Poor’s said it placed its ratings, including its BB+ corporate credit rating, on Interpublic Group of Cos. Inc. on CreditWatch with positive implications.

The CreditWatch placement reflects Interpublic’s better-than-expected organic revenue growth of 4.8% for fourth-quarter 2014 and 5.5% for full-year 2014. The company also experienced margin expansion of roughly 200 basis points to 17.8% in 2014 due to restructuring and related costs taken in 2013 but were still up solidly excluding any one-time items, S&P said.

Excluding one-time items, margins could remain above 17.5% in 2015, absent a reversal in recent operating trends.

“We could upgrade the company if it achieves and maintains adjusted EBITDA margin above 17.5% (the midpoint of the 15%-20% range that we consider average for the industry) and adjusted net leverage in the low-2x area,” S&P said in a news release.

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