S&P gives Open Text, loan BB-

Standard & Poor's said it assigned its BB- long-term corporate credit rating to Open Text Corp.

At the same time, S&P said it assigned its BB- bank loan rating, with a recovery rating of 2, to the company's proposed $490 million senior secured bank facility, which consists of a $75 million five-year revolving credit facility and a $415 million seven-year term loan B.

The outlook is negative.

S&P noted that the ratings on Open Text reflect its stable market position within a niche segment of the software industry, its solid scale given a large installed base of customers, good customer and geographic diversity, a large base of recurring revenues and a history of generating good free operating cash flow.

These factors are partially offset by a highly competitive and consolidating technology marketplace characterized by the presence of bigger and better-integrated vendors, an aggressive financial policy, declining organic software license revenue growth, weaker execution and significant integration risk from the Hummingbird acquisition, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.