S&P cuts SMS Systems Maintenance

S&P said it lowered its corporate credit rating on SMS Systems Maintenance Services Inc. and lowered the issue-level rating on the company's $55 million revolving credit facility due 2022 and its $530 million first-lien term loan to B from B+. The 2 recovery rating is unchanged, indicating an expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of payment default.

The agency also lowered the issue-level rating on the company's $175 million second-lien term loan to CCC from CCC+. The 6 recovery rating is unchanged, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of payment default.

The outlook is stable.

“The downgrade reflects our view of SMS's adjusted leverage above 8x, pro forma for the Curvature acquisition, which closed in February,” S&P said in a news release.

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