S&PGR AFMS Advantage Solutions 'B-' ICR; outlook stable

S&PGR AFMS Advantage Solutions 'B-' ICR; outlook stable

Standard & Poor’s Global Ratings (S&P) has downgraded its issuer credit rating (ICR) for Advantage Solutions Inc. to 'B-' from a previously higher rating, with a stable outlook, citing uncertainties surrounding the company's ongoing exchange offer. The downgrade reflects concerns about the firm's capital structure and the risks associated with its proposed transaction, which could impact its financial flexibility and debt servicing capacity. S&P noted that the exchange offer's outcome remains unclear, complicating its ability to assess the company's long-term creditworthiness.

The ratings action underscores broader challenges in Advantage Solutions' business model, which relies heavily on its pharmacy benefit manager (PBM) operations and partnerships with retail pharmacies. While the company has demonstrated operational scalability, S&P emphasized that its credit profile remains vulnerable to market volatility, regulatory shifts, and liquidity constraints. The stable outlook indicates that further downgrades are unlikely unless the exchange offer's risks materialize or the company's financial metrics deteriorate significantly.

Separately, AM Best has revised the outlook for Advantage Life Assurance I.I. to negative from stable, citing concerns about its balance sheet and capitalization metrics. This action, however, pertains to a distinct entity and does not directly affect S&P's rating of Advantage Solutions. Investors are advised to monitor developments in both the exchange offer and the company's capital management strategies for potential implications on credit ratings.

Investing.com: Investing.com
AM Best Press Release: AM Best Press Release