S&P lowers CSG Systems debt to BBB-

S&P Global Ratings said it reviewed its recovery and issue-level ratings on CSG Systems International Inc. that were labeled as "under criteria observation" (UCO) after publishing its revised recovery ratings criteria on Dec. 7.

With its criteria review complete, the agency removed the UCO designation from these ratings and lowered its rating on CSG's secured debt to BBB- from BBB because it now caps issue ratings for speculative-grade issuers at BBB-, regardless of recovery rating. The recovery rating is 1, indicating an expectation for very high (90%-100%) recovery for secured creditors in the event of a payment default.

This change deemphasizes the weight recovery plays in the up-notching issue ratings for issuers near the investment-grade threshold, because recovery is a smaller component of credit risk when default risk is more remote and because recovery prospects may be less predictable and more variable for these issuers, S&P said.

This revision does not reflect a change in the agency’s assessment of the company's default risk or its opinion of recovery given default.

These actions stem solely from the application of S&P’s revised recovery criteria and do not reflect any change in its assessment of the corporate credit ratings for issuers of the affected debt issues.

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