Fitch ups Micro Focus loans

Fitch Ratings said it raised Micro Focus International plc’s senior secured debt rating to BB+/RR1 from BB/RR1 for their respective first-lien credit facilities, resulting from the application of Fitch's updated “Corporates Recovery Ratings and Instrument Ratings Criteria” dated April 9, resolving the under criteria observation.

Concurrently, the agency affirmed the BB- issuer ratings on Micro Focus, MA FinanceCo LLC and Seattle Spinco and revised the outlook to negative from stable.

“Micro Focus continues to be plagued by operating underperformance following the HPE carve-out acquisition with current guidance indicating fiscal 2021 revenue is tracking to be approximately 35% below pro forma revenue at the time of the announcement in 2016. Sales execution challenges, delays in IT systems implementations, attrition in sales personnel and disruption in the acquired customer base due to deconsolidation from HPE have caused the company to either fall short of consensus estimates or reduce guidance in every year since the transaction,” Fitch said in a press release.

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