Moody's affirms Corel

Moody's Investors Service said it affirmed the B3 corporate family and senior secured bank loan ratings of Corel Corp. after reviewing Corel's pending $195 million acquisition of InterVideo, Inc. The acquisition will be financed with cash on hand and the proceeds from a proposed offering of up to $100 million senior secured term loan, which is also rated B3.

The outlook was changed to positive, reflecting Moody's view that a successful integration of InterVideo coupled with continued growth in revenue and profits could position Corel for an increased rating.

The agency said that while it remains concerned about Corel's reliance on technical information sharing from its two primary competitors, Microsoft Corp. and Adobe Systems, Moody's views the addition of InterVideo with its successful line of video editing, burning and playback software as a positive diversification to Corel's existing portfolio of software products, a diversification which could ultimately lead to a higher rating.

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