S&P cuts Smart Technologies, loan

Standard & Poor's said it lowered its long-term corporate credit rating on Smart Technologies, Inc. to CCC+ from B-.

The outlook is negative.

At the same time, the agency lowered its issue-level rating on Smart’s $125 million term loan to B- from B+ and revised its recovery rating to 2 from 1. The 2 recovery rating indicates an expectation for substantial (70%-90%; lower half of range) recovery in the event of a default.

The downgrade follows the company's announcement that its fiscal 2016 (ended March 2016) outlook has deteriorated relative to Smart’s previous expectations due to slower-than-anticipated demand for recently launched product Smart kapp.

"The downgrade is based on our expectation that the company will experience weak operating trends that will result in stretched credit metrics and approximately break-even-to-negative free operating cash flow in the near-term," S&P credit analyst David Fisher said in a news release.

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