S&P lifts NCR unsecured notes

S&P said it raised its ratings on NCR Corp.’s senior unsecured notes to B+ from B and revised the recovery rating to 4 from 5 based on an expectation of a substantial reduction of secured debt.

The agency said it affirmed NCR’s B+ issuer rating and removed it from CreditWatch with developing implications where it had been placed on Sept. 22, 2022. The outlook is stable. It also affirmed NCR’s secured debt at BB with a 1 recovery rating.

“Following the spin-off of its ATM and debit network businesses, NCR Corp. (NCR Voyix post-separation) will focus on digital commerce including retail, hospitality, and digital banking. We expect NCR will generate about $3.8 billion of revenue and $580 million of EBITDA (S&P Global Ratings-adjusted) in 2023,” S&P said in a press release.

The agency said it forecasts NCR’s adjusted leverage to narrow to 5x within 12 months of the transaction’s close from a pro forma 6.8x at March 31.

“The stable outlook reflects our expectation for 3%-4% revenue growth and FOCF improvement to about $325 million over the following 12 months, post-transaction close because recurring and contracted sources comprise a meaningful portion of revenues. We also expect meaningful deleveraging to below 5x over the same time frame,” S&P said.

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