Moody’s gives Kronos facilities B2, Caa2

Moody's Investors Service said it affirmed Kronos Inc.’s B3 corporate family rating and B3-PD probability of default rating, and assigned B2 and Caa2 ratings, respectively, to the company's new first- and second-lien credit facilities.

The outlook is stable.

The company will use net proceeds from the new credit facilities to refinance $2.7 billion of existing debt and fund a distribution to its shareholders. Moody's will withdraw the ratings for Kronos' existing credit facilities upon the close of the refinancing.

Moody’s said the affirmation of the B3 corporate family rating reflects Kronos' strong track record of revenue growth since fiscal year 2009 and growing proportion of recurring software maintenance and subscription revenues. Although the agency expects the company's financial metrics to remain weak over the next 24 months, its credit profile will emerge stronger from the shift to Software as a Subscription (SaaS) sales.

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