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S&P rates Open Text loan BBB-
S&P said it assigned its BBB- issue-level rating to Open Text Corp.’s (BB+/stable) proposed $1 billion term loan B.
The 1 recovery rating represents an expectation of very high (90%-100%; rounded estimate 95%) recovery in the event of a default.
The company plans to refinance its existing $766 million term loan with the proposed issuance and extend the maturity to 2025 from 2021.
S&P said it expects the incremental borrowing along with cash on the balance sheet to repay the outstanding balance of about $275 million on the company's $450 million revolver.
“In our view the proposed transaction, which we consider credit neutral, improves Open Text's liquidity position to support the company's acquisitive growth policy,” the agency said in a news release.
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