S&P lowers AI Avocado, debt

S&P said it lowered its long-term corporate credit rating on AI Avocado Holding BV (Unit4) to B- from B.

The outlook is stable.

At the same time, the agency lowered to B- from B the issue ratings on AI Avocado’s senior secured debt, consisting of €670 million of term loans, a $30 million incremental facility and a €72 million revolving credit facility.

The recovery rating is 3, indicating an expectation of meaningful (50%-70%; rounded estimate 50%) recovery in the event of a payment default.

S&P said it no longer believes AI Avocado will be able to significantly improve its profitability and cash flow generation in 2017 and 2018, due to the company's ongoing transition from licenses to software as a service, and what the agency now views as slow progress with trimming costs and still-high exceptional expenses.

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