Moody’s lifts Hyland Software

Moody's Investors Service said it upgraded Hyland Software, Inc.'s corporate family and probability of default ratings by one notch to B2 and B2-PD.

Moody's also said it affirmed the existing first-lien credit facilities ratings at B2 and assigned a B2 rating to the incremental first-lien credit facility.

The outlook is stable.

The proceeds from the increase in the first-lien term loan of $155 million and nominal amount of cash from the balance sheet will be used to repay the $155 million senior secured second-lien term loan in full, along with fees and expenses, Moody’s said.

The amount of the revolver will be unchanged at $40 million and is expected to be unfunded at closing, the agency said.

The upgrades reflect an expectation for a continuation of Hyland's solid revenue and profitability growth and an expectation that Hyland will continue to generate free cash flow-to-debt of at least the mid-single digits, Moody’s said.

The ratings also consider the company's high business risks resulting from its modest operating scale relative to some of its competitors and its limited product portfolio, the agency said.

The stable outlook reflects an expectation of leverage of about 5.5x over the next 12 months, Moody’s said.

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