Moody's cuts CSG Systems loans to Ba3

Moody's Investors Service said it downgraded CSG Systems International Inc.'s senior implied rating and its bank revolver and term loans to Ba3 from Ba2. All other ratings were cut similarly by one notch.

The outlook is stable.

Moody's said the ratings reflect the lost revenues and cash flow CSG will experience due to the award and related price reduction to Comcast resulting from the arbitration decision. The ratings also consider the time it will take to rebuild the lost Comcast revenue and the risk that Comcast will cancel or reduce its agreement with CSG. This is further compounded by the company's recent softness in both the Broadband and GSS divisions.

However, the ratings also reflect CSG's still strong projected coverage ratios and cash flow generation, high contract renewal rates, and customer diversification beyond Comcast concentration.

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