S&P: SMS Systems Maintenance loans B+, CCC+

S&P said it assigned its B corporate credit rating to SMS Systems Maintenance Services Inc.

The outlook is stable.

At the same time, the agency assigned its B+ issue-level rating and 2 recovery rating to the company's $40 million revolving credit facility due 2022 and its $260 million first-lien term loan due 2023. The 2 recovery rating indicates an expectation for significant (70%-90%; at the lower end of the range) recovery in the event of payment default.

S&P also assigned a CCC+ issue-level rating and 6 recovery rating to the company's $115 million second-lien term loan due 2024. The 6 recovery rating indicates an expectation for negligible (0%-10%) recovery in the event of a payment default.

"The rating on SMS reflects our view of its business risk, characterized by its small scale within the server maintenance market, a competitive marketplace dominated by service packages provided by much larger original equipment manufacturers, modest organic growth, and modest customer concentration with top 25 customers representing 40% of revenues," S&P credit analyst Dee J. Banson said in a news release.

"Its highly recurring revenue model and good operating margins partly offset these factors."

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