S&P cuts DigiCert’s first-lien loan, ups second lien

S&P said it affirmed its B- issuer credit rating on DigiCert Parent Inc. The outlook is stable.

At the same time, S&P said it lowered the issue-level rating on DigiCert's revolving credit facility and first-lien term loan to B- from B and revised the recovery rating to 3 from 2. The 3 recovery rating reflects an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery of principal in the event of a payment default.

In addition, the agency raised its issue-level rating on DigiCert's second-lien term loan to CCC+ from CCC and revised the recovery rating to 5 from 6. The 5 recovery rating reflects an expectation of negligible (10%-30%; rounded estimate: 10%) recovery of principal in the event of a payment default.

“The rating action reflects a change in DigiCert's capital structure, with an increase of $100 million of first-lien debt and a corresponding reduction in the company's second-lien debt,” S&P said in a news release.

“The company also expects to reprice its first-lien debt as part of the transaction. Both proposed transactions are credit positive and should lower annual interest expense by at least $10 million.”

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