S&P lifts Unit4

S&P said it raised its ratings for Bock Capital Bidco BV (Unit4), its term loan and revolver to B- from CCC+. The recovery rating remains unchanged at 3 (rounded estimate: 50%).

“The upgrade reflects credit metrics improving significantly in 2023 and our forecast of a positive trend in 2024, supported by higher margins as the actions taken through 2022-2023 will likely propel profitability. We forecast adjusted EBITDA margins will rise to approximately 25% in 2023 and to about 27% in 2024,” S&P said in a press release.

Assuming no dividends or acquisitions, S&P said it expects adjusted debt to EBITDA to be near 9x in 2023 (below 6.5x excluding the payment-in-kind notes) and declining to below 8.5x (below 6x) in 2024.

The outlook is positive.

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