S&P: Consona view negative

Standard & Poor's said it revised the outlook on Consona ERP Inc. to negative from stable. The corporate credit rating was affirmed at B-.

Consona's $109 million senior secured bank facility is rated B+ with a recovery rating of 1, reflecting 90% to 100% recovery. The $85 million second-lien term loan is rated CCC, with a recovery rating of 6, indicating up to 10% recovery.

S&P said the outlook revision reflects weaker-than-anticipated operating performance and limited financial flexibility resulting from existing bank agreement requirements.

The rating reflects Consona's rapid growth through acquisitions and high debt leverage, the agency said.

These factors are offset partially by the company's good presence in its target mid-market customer segment and significant recurring revenue base, according to the agency.

Operating lease-adjusted total debt-to-EBITDA ratio was in excess of 7 times in fiscal 2007, which the agency said was high but adequate for the rating level.

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