S&P cuts Applied Systems to B-

S&P said it lowered Applied Systems Inc.’s corporate credit rating to B- from B and assigned a B issue-level rating to the company's $1.08 billion first-lien credit facility, consisting of a $50 million revolving credit facility due 2022 and a $1.03 billion first-lien term loan due 2024.

The 2 recovery rating indicates an expectation of substantial (70%-90%; rounded estimate 70%) recovery in the event of a default.

The agency also assigned its CCC issue-level rating to the company's $495 million second-lien term loan due 2025. The 6 recovery rating indicates an expectation of negligible (0%-10%; rounded estimate 5%) recovery in the event of a default.

The outlook is stable.

“The rating action reflects our anticipation that leverage will exceed the 8x downside threshold for the next 18 months," S&P credit analyst Geoffrey Wilson said in a news release.

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