S&P downgrades Hyland Software

S&P said it lowered its issuer credit rating on Hyland Software Inc. to B- from B. The outlook is stable.

At the same time, the agency lowered the issue-level rating on the company's first-lien secured debt to B- from B. The 3 recovery rating remains, indicating an expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default.

S&P also lowered the issue-level rating on the company's second-lien secured debt to CCC from CCC+. The 6 recovery rating remains, indicating an expectation for negligible recovery (0%-10%; rounded estimate: 5%) in the event of a payment default.

“The downgrade reflects Hyland's pro forma leverage for the distribution – which was above our downside trigger for the rating – its aggressive financial policy, and the uncertainty over its multi-year growth prospects, which could slow the pace of its deleveraging.”

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