Moody's rates Genesys loans B1

Moody's Investors Service said it affirmed the B2 corporate family rating and B2-PD probability of default rating of Greeneden US Holdings II, LLC (Genesys) and assigned B1 (LGD3, 36%) ratings to the $675 million senior secured term loan due 2020 and $50 million senior secured revolving credit facility. The outlook is stable.

The company is extending by one year the maturity of the $50 million revolver and reducing the interest rate, and the new term loan will refinance the existing $572 million term loan due 2019. After financing costs, Genesys will have net proceeds of about $90 million, which Moody's believes will be used to fund acquisitions.

The agency said the B2 corporate family rating reflects its expectation that due to the increased debt upon the refinancing and modest free cash flow generation, financial leverage within the Genesys borrowing group will remain above 4.5 times EBITDA (Moody's adjusted) over the near term, which is high given the relative maturity of the contact center software market.

Nevertheless, Moody's said Genesys has a relatively good market position, and its long-term customer base provides a recurring maintenance revenue stream.

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