Moody's: Open Text loan Ba1

Moody's Investors Service said it affirmed Open Text, Inc.'s Ba2 corporate family rating and rated the company's proposed $600 million senior secured term loan senior secured revolver and senior secured delayed draw term loan Ba1 (LGD2, 26%), the same as the previous senior debt ratings.

The new facilities will be used to replenish cash used to finance the acquisition of Global 360, refinance existing debt and for working capital purposes.

The outlook remains positive.

The speculative-grade liquidity rating was revised to SGL-2 from SGL-1. Moody's affirmed the $75 million senior secured revolver due 2011 and $286 million senior secured term loan due 2013 at Ba1 (LGD2, 21%).

While the proposed debt increases leverage, the increase is modest and the acquisition of Global 360 furthers Open Text's offerings in the business process management software segment, the agency said.

The ratings reflect the company's leading position within the ECM market with one of the broadest suites of products in the industry, the agency added. The ratings are constrained by limited diversification outside the ECM sector as well as the company's potential for additional debt financed acquisitions as they continue to consolidate companies within the sector.

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