S&P rates UKG loan B-

S&P said it rated UKG Inc.’s refinanced revolving credit facility and first-lien term loan B- with a 3 recovery rating. The agency also revised the outlook to stable from negative.

“We expect UKG's unadjusted FOCF generation, after mandatory principal payments and non-discretionary equity payments, will be positive in fiscal 2024 and 2025. Due to different factors, UKG generated negative reported FOCF in fiscal 2022 and 2023, ending in September. UKG incurred high one-time costs related to its Kronos Private Cloud (KPC) cyber incident and savings plan to right-size its cost structure in a tougher macroeconomic environment,” S&P said in a press release.

The agency said it sees UKG’s EBITDA margins in the mid-20% area with positive free operating cash flow.

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