S&P lifts Mercury Payment

Standard & Poor's said it raised the ratings on Mercury Payment Systems LLC's $25 million first-lien revolving credit facility and $200 million first-lien term loan B to BB from BB-.

The agency also revised the recovery ratings on this debt to 1 from 2.

The 1 recovery rating indicates 90% to 100% expected recovery in a default.

The higher ratings are the result of a revision to the recovery analysis that increased the estimated recovery valuation at the time of default, S&P said.

The increased valuation was precipitated by the company's continued strong growth, improvement in EBITDA margins and successful completion of its in-house processing platform build-out, the agency said.

S&P also said it revised the presumed default year to 2017 to coincide with the maturity of the company's term loan.

The ratings reflect its weak business risk and aggressive financial risk profiles, the agency said.

The business risk incorporates the company's narrow addressable market, modest EBITDA base, high level of competition from entities with significantly better resources and the risks associated with the transition to its in-house processing platforms, S&P said.

Partially tempering these considerations are the company's embedded position within its market niche and consistently strong growth and operating performance, the agency added.

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