Moody’s: Open Text notes Ba2

Moody’s Investors Service said it affirmed Open Text Corp.’s Ba1 corporate family rating and assigned a Ba2 (LGD 5) rating to the company’s proposed senior unsecured notes.

The agency also said it upgraded Open Text’s senior secured debt facilities to Baa2 (LGD 2) from Baa3 (LGD 2) and affirmed the Ba2 rating on the company’s existing senior unsecured notes due 2023.

The proceeds will be used for general corporate purposes, including acquisitions, Moody’s said.

The outlook remains stable.

The upgrades reflect the increasing proportion of junior debt in the company’s capital structure, the agency said.

The company’s secured debt is now supported by additional cash in the capital structure, Moody’s said.

The ratings also consider Open Text’s leading position within the growing $5 billion enterprise content management market and business-to-business information exchange market, the agency said.

The company is expected to maintain relatively conservative financial policies and long term debt-to-EBITDA is expected to trend to less than 3x, Moody’s said.

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