Moody's cuts Activant corporate credit, rates PIK notes Caa1

Moody's Investors Service said it downgraded the corporate family rating of Activant Solutions Inc. to B2 from B1 while confirming ratings of B2 on existing outstanding debt.

Concurrently, Moody's confirmed a B2 rating on Activant's incremental debt of $140 million senior unsecured notes due 2010, issued to finance its acquisition of Prophet 21 Inc., and assigned a Caa1 rating to $40 million PIK notes due 2011 issued by Activant Solutions Holdings Inc.

The outlook is stable.

Moody's said the B2 corporate family rating continues to be supported by (1) Activant's leadership positions, partly through acquisitions, in its key vertical markets; (2) solid operating metrics including maintenance contract renewal rates; and (3) the expectation that Activant will continue to generate free cash flow.

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