S&P lowers Sungard Availability

S&P said it lowered the corporate credit rating on Sungard Availability Services Capital Inc. to CCC+ from B-.

The outlook is negative.

At the same time, the agency lowered the issue-level ratings on the company's senior secured revolvers expiring March 2018 and September 2020, $425 million outstanding senior secured term loan due March 2019, and $471 million outstanding senior secured term loan due September 2021 to B- from B.

The 2 recovery rating is unchanged, indicating an expectation for substantial (70%-90%; rounded estimate: 80%) recovery in the event of payment default.

S&P also lowered the issue-level rating on the company's senior notes due 2022 to CCC- from CCC. The 6 recovery rating is unchanged, indicating an expectation for negligible (0%-10%; rounded estimate: 5%) recovery in the event of payment default.

The downgrade results from the company's weak free operating cash flow generation despite reduced capital expenditures, and an expectation for negative free operating cash flow continuing into 2018 barring a meaningful improvement in operating performance, the agency explained.

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