Bankrate (RATE) Places on CreditWatch Negative by S&P

Standard & Poor's Ratings Services said that it placed its ratings, including its 'BB-' corporate credit rating, on Bankrate (NYSE: RATE) on CreditWatch with negative implications.

The CreditWatch placement follows Bankrate's announcement that the SEC is conducting an investigation at the company that will focus on various accounting issues related to the first and second quarters of 2012. Although the investigation does not seem to have a significant impact on Bankrate's financial performance at this point, it is still in its initial stages. The company's statement that its financial statements for fiscal years 2011, 2012, and 2013 (ending December) can no longer be relied upon creates significant uncertainty as to its true financial condition.

The appointment of a new CFO, concurrent with the investigation, raises additional risk, given the discontinuity of financial management at a crucial juncture.

We aim to resolve the CreditWatch placement within the next three months after receiving the results of the SEC investigation and the company's internal review. "We could lower the ratings if the SEC investigation results in a material impact on the previous financial statements, significant fines, or causes a breach of any covenants in the credit agreement," said Standard & Poor's credit analyst Jawad Hussain. "On the other hand, we could revise the outlook to stable if the SEC investigation is concluded with minimal impact on the company."

You May Also Be Interested In

• Camden Property Trust (CPT) Announces Executive Changes
• NRx Pharmaceuticals (NRXP) Prices $2M Share Offering at $3.30/sh
• Kartoon Studios (TOON) Prices 7M Share Offering at $1/sh