S&P cuts Digital River first-lien debt

S&P said it affirmed its B- corporate credit rating on Digital River Inc. The outlook is stable.

The agency lowered its issue-level rating on the company's first-lien credit facilities to B from B+ based on its revision of the recovery rating to 2 from 1, which indicates an expectation of substantial (70%-90%; rounded estimate: 80%) recovery in the event of payment default.

The issue-level rating on the company's second-lien term loan remains CCC+. The 5 recovery rating indicates an expectation of modest (10%-30%; rounded estimate: 20%) recovery.

S&P said the affirmation and stable outlook are based on a view that the incremental liquidity provided by a $30 million equity capital infusion, covenant relief from a recently agreed-upon loan amendment, and an improved cost structure give the firm sufficient cushion to navigate revenue and EBITDA declines in 2017 from the loss of significant business managing Microsoft's e-commerce platform, and that the firm's capital structure remains sustainable.

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