Moody's rates Aspect Software loans B1

Moody's Investors Service said it assigned first-time ratings to Aspect Software Inc., including a B2 corporate family rating, a B1 rating for its $50 million revolving credit facility due 2010 and a B1 rating for its $425 million senior secured term loan due 2010.

The outlook is stable.

Proceeds of the term loan and an unrated secured lien facility will be used to finance the $788 million acquisition of Aspect Communications Corp. (Heritage Aspect) by Concerto Software Inc. (Heritage Concerto) with the new company to be named Aspect Software Inc.

Moody's said the ratings reflect (1) the relatively mature nature of the call center software business; (2) ongoing competition with larger, better financed competitors, despite the company's increased scale and potential and possible leadership positions in key products; (3) possible integration risks as Heritage Concerto making its biggest acquisition thus far over the past 18 months; (4) high leverage resulting from the combination with the potential for additional leverage from possible leveraged dividends of the company's venture investors.

Moody's said the ratings also consider (1) the combined entity will become one of the largest contact center software providers with product strengths in each of the key contact center categories; (2) diversified client base of more than 5,000 installed customers across a wide range of industry sectors; (3) good revenue and cashflow visibility with reasonable software maintenance contract renewal rates; (4) and reasonable credit protection measures with free cashflow representing more than 10% of combined debt amount.

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