Moody’s rates SS&C CFR B1, loans Ba3, notes B3

Moody's Investors Service said it assigned SS&C Technologies Holdings, Inc. a B1 corporate family rating, B1-PD probability of default rating and an SGL-1 speculative grade liquidity rating.

The agency also assigned provisional Ba3 ratings to the new $2.6 billion of senior secured credit facilities being issued by subsidiaries SS&C Technologies, Inc., SS&C Technologies Holdings Europe Sarl and SS&C European Holdings Sarl, and a provisional B3 rating to the $500 million of new senior unsecured notes at SS&C.

The outlook is stable.

SS&C will use the proceeds from the new debt issuances and $400 million from a secondary equity offering to complete the acquisition of Advent Software, Inc. for about $2.7 billion in cash, including assumption of debt, and refinance SS&C's $601 million of existing debt.

As part of this action, Moody's withdrew SS&C Technologies, Inc.'s existing Ba2 corporate family rating, Ba3-PD probability of default rating and SGL-1 speculative grade liquidity rating. At the close of the transaction and upon repayment of existing debt, the existing Ba2 ratings for credit facilities issued by SS&C Technologies, Inc. and SS&C Technologies Holdings will be withdrawn.

These actions conclude the review initiated on Feb. 4 in connection with SS&C's plans to acquire Advent.

Moody’s said the acquisition of Advent will increase the company’s operating scale and expand product offerings. The combination of Advent's software offerings with SS&C's software-enabled-services will generate cross-selling opportunities to a combined base of over 10,000 customers.

However, SS&C's leverage will increase to about 6.4 times from 2.1 times (Moody's-adjusted, total debt to EBITDA) at the close of the acquisition, before including about $46 million of planned cost savings that will be fully reflected in the earnings only over the next three years.

Although Moody's expects leverage to decline by about a turn annually, the company’s financial risk will remain elevated over the next 12 to 18 months while the company will be integrating its largest acquisition to date.

The B1 corporate family rating primarily reflects the elevated financial risk and management's high financial risk tolerance and acquisitive growth strategy.

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