Fitch cuts Conga

Fitch Ratings said it downgraded the issuer ratings for Project Everest Ultimate Parent, LLC and its wholly-owned subsidiary, Apttus Corp. (collectively, Conga) to B from B+. The agency also cut Apttus' first-lien secured term loan and secured revolver to BB-/RR2 from BB/RR2.

“The rating downgrade reflects elevated leverage and negative FCF in FY23. Other considerations include low (and negative) CFO less capex to debt, which is not expected to be over 5% until FY26, and the company will need to reduce operating expenses as a percentage of revenues to achieve that,” Fitch said in a press release.

Previously, the agency warned of a possible negative rating action if Conga’s sustained leverage topped 5.5x. Conga's leverage was 6.6x at the end of FY23, its fiscal year ends Jan. 31 down from 7.5x at the end of FY22.

The outlook is stable.

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