Fitch revises RealPage view to negative

Fitch Ratings said it changed the outlook to negative from stable and affirmed the long-term issuer default rating for RealPage Intermediate Holdings, Inc. and its wholly owned subsidiary, RealPage, Inc. at B. Fitch also affirmed RealPage Inc.'s first-lien secured revolver and term loan at B+/RR3 and the second-lien term loan at CCC+/RR6.

“The negative outlook reflects Fitch's concerns about elevated leverage and the company's ability to significantly reduce operating expenses. The company benefits from its liquidity position which is also supported by strong FCF generation. Fitch previously stated it would take negative rating action if RealPage's leverage was above 7x beyond 2023. Fitch is now concerned about the company's ability to achieve lower costs and realize significant margin expansion which would drive down leverage. Fitch is also concerned about the investigation into the company's software, YieldStar,” the agency said in a statement.

U.S. senators asked the Justice Department to investigate the company’s rent-setting algorithms in its Yieldstar software. There also are class action lawsuits in multiple states.

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