Moody's cuts Syniverse outlook to negative

Moody's Investors Service said it changed Syniverse Technologies, Inc.'s outlook to negative from stable and affirmed the company's Ba3 corporate family rating following the announcement of the company's plan to acquire, using debt, Billing Services Group's wireless data and financial clearing and settlement businesses for $290 million.

The agency said the change in outlook reflects the increase in debt at time when Syniverse's core product offerings are experiencing pricing pressures and moderate declines in operating profit and Moody's expectation of continued debt-financed acquisitions. The agency estimated that the debt-to-EBITDA ratio will increase to 4x from 2.6x pro forma for the acquisition.

The acquisition will likely bring synergies and growth to international operations, Moody's said, but the increased leverage reduces flexibility as the company faces declines in its North American business.

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