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S&P lowers Kronos to negative; rates loans B, CCC+
Standard & Poor's said it revised the outlook on Kronos Inc. to negative from stable.
The agency also said it affirmed its B corporate credit rating and assigned a B rating to the new first-lien debt with a 3 recovery rating, which indicates 50% to 70% expected recovery in a default.
S&P also assigned a CCC+ rating with a recovery rating of 6, indicating 0% to 10% recovery expectation, to the new second-lien credit facilities.
The outlook revision reflects the company's more aggressive financial policy and the increase in debt being used to fund the shareholder distribution, said Jacob Schlanger, an S&P analyst.
The ratings reflect the company's focus on workforce management, a niche segment in the $7.5 billion human capital management market and high leverage, the agency said.
Sufficient free cash flow and fairly predictable revenue generation partially offset those factors, S&P said.
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