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Moody's upgrades SS&C loans
Moody's Investors Service said it affirmed SS&C Technologies Holdings, Inc.'s Ba3 corporate family rating, Ba3-PD probability of default rating, B2 (LGD 3) rating on the unsecured notes issued by SS&C Technologies, Inc. and its speculative grade liquidity rating at SGL-1.
Moody's also said it upgraded the ratings on the company's senior secured credit facilities to Ba2 (LGD 3) from Ba3 (LGD 3).
The upgrade on the bank debt follows the recent upsizing of the senior unsecured note issue to $2 billion from $750 million and resulting reduction in outstanding bank debt, which adds material incremental first loss support to the senior secured credit facilities, the agency said.
Moody's said it affirmed the ratings because debt and leverage are unchanged and the increase in cash interest costs is not significant in relation to the company's free cash flow.
The outlook is stable.
The ratings are constrained by the company's elevated pro forma gross leverage of about 6x, Moody's said.
The ratings also reflect the company's acquisitive growth strategy and execution risk related to the integration of three sizable acquisitions consummated over the past year, the agency said.
The ratings are negatively impacted by the company's concentrated vertical market focus as a provider of software and software-enabled services to the economically sensitive financial services industry, Moody's said.
The ratings are supported by SS&C's large operating scale, sizable free cash flow, driven by strong projected profitability, management's solid track record of integrating prior acquisitions and quickly de-leveraging after acquisitions, the agency said.
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