S&P downgrades MYOB

S&P said it downgraded MYOB, its first-lien term loan and revolver ratings to B- from B. The recovery ratings on the A$920 million term loan B and A$50 million revolver are 3, reflecting meaningful (50%-70%; rounded estimate: 65%) recovery prospects in a payment default.

“We lowered the ratings to reflect our view that MYOB’s significant acceleration of R&D capital expenditure to augment software development functions will materially deplete its forecast EBITDA (after S&P Global Ratings’ adjustments). MYOB intends to increase research and development (R&D) capital expenditures (capex) substantially from our initial expectations of around A$60 million in the year ending Dec. 31, 2020,” S&P said in a press release.

The outlook is negative.

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