S&P lowers Exact to negative

S&P said it revised the outlook on Eiger Acquisition BV (Exact) to negative from stable.

The agency also said it affirmed the company’s B long-term corporate credit rating.

S&P also said it affirmed the B rating on Exact's senior secured loans due 2022 and the revolving credit facility due 2020.

The recovery rating is unchanged at 3, indicating 50% to 70% expected default recovery.

S&P also said it affirmed the CCC+ rating on the senior unsecured loans due 2023. The 6 recovery rating on the notes is unchanged, indicating 0 to 10% expected default recovery.

The outlook revision follows news that the company reported a higher cash outlay to its Cloud Solutions International (CSI) business than expected, the agency said.

This causes concerns that continued heavy losses could result in accelerated investment needs and lead to further cash burning over the next two years if the company does not significantly increase its topline and profits of its core business, S&P explained.

At the same time, Exact's core business is developing as expected and experiencing revenue growth and stable profitability, mainly driven by its high growth in the cloud solutions segment, the agency said.

The company is in a good position to benefit from further positive demand for cloud solutions, S&P added.

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