Jul. 31 at 10:35 PM
S&P Global Ratings upgraded System1 to 'CCC+' from 'D' after the company completed a debt restructuring that exchanged its revolving credit facility and term loan for cash, preferred equity, and a new
$150 million senior secured term loan due 2031. S&P also assigned the new loan a 'CCC+' issue rating and a recovery rating of '3'.
The restructuring significantly improves System1's capital structure, with S&P now expecting adjusted gross leverage of about 9x in 2026 versus its previous expectation of well above 10x. Annual interest expense is projected to decline to roughly
$15 million from about
$28 million, supporting a return to positive free cash flow.
S&P noted that System1 has faced declining revenue and EBITDA in recent years due to weaker digital advertising pricing, ongoing headwinds from its Google partnership—which accounts for approximately 67% of revenue—macroeconomic pressures, and restructuring costs.
$SST