S&P lowers Genesys, rates loans B-, notes CCC

S&P said it lowered the corporate credit rating to B- from B on Greeneden US Holdings LLC, which does business as Genesys, and removed all of the ratings from CreditWatch with negative implications.

Genesys was placed on negative watch in September following news that it will acquire Interactive Intelligence Inc. for about $1.5 billion.

The outlook is stable.

S&P also said it assigned a B- rating and 3 recovery rating to the company's proposed $150 million revolving credit facility due 2021, $1.55 billion term loan B due 2023 and $550 million euro-equivalent term loan B due 2023.

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

The agency also said it assigned a CCC rating to the company's expected $700 million senior unsecured notes due 2024 based on a 6 recovery rating. The 6 recovery rating indicates 0 to 10% expected default recovery.

The downgrade reflects significantly higher leverage at Genesys following the transaction, S&P explained.

The new debt will fund the acquisition, refinance Genesys and Interactive's existing debt and fund a partial return of equity to Genesys's private equity sponsors. Following the deal, Permira and other original sponsors will own 51% of the company while Hellman & Friedman will own 48%, the agency said.

The company’s leverage will increase to more than 12x from the low-5x range as of the end of June 2016, S&P said.

This leverage is expected prior to any of the expected cost savings or synergies of the acquisition, the agency added.

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