S&P: SonicWALL loans B, B-

S&P said it assigned a B corporate credit rating to Seahawk Holdings Ltd.

The outlook is stable.

The agency also said it assigned a B rating and 3 recovery rating to SonicWALL US HoldCo.'s $1.425 billion first-lien credit facility, consisting of a $100 million five-year revolving credit facility and $1.350 billion six-year term loan.

The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it assigned a B- rating and 5 recovery rating to SonicWALL's $275 million seven-year second-lien term loan. The 5 recovery rating indicates 10% to 30% expected default recovery.

Francisco Partners LLC and Evergreen Coast Capital Corp., through their respective affiliated funds, have entered into a definitive agreement to acquire the businesses that previously constituted Dell Software Group, an operating segment of Dell Inc., for about $2.4 billion.

These businesses will operate under the Quest Software, One Identity and SonicWALL names, S&P explained, and will be collectively owned by Seahawk Holdings.

The new loans will fund the transaction, the agency said.

The rating is based on Seahawk's weak EBITDA margin profile and the potential for near-term operational disruption from the separation from Dell Inc., S&P said.

Good product and end-market diversity, along with its participation in a number of rapidly growing markets, partially offset these risks, the agency said.

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