Moody's rates JDA notes B1

Moody's Investors Service said it assigned a B1 (LGD4, 68%) rating to JDA Software Group, Inc.'s proposed $275 million senior unsecured notes due 2014, lifted the probability-of-default rating to Ba3 from B2 and affirmed the company's B1 corporate family rating and SGL-2 speculative-grade liquidity rating.

The outlook is stable.

Proceeds from the proposed notes will be used to finance JDA's proposed acquisition of i2 Technologies, Inc.

The agency said the B1 corporate family rating incorporates its favorable view of the intended transaction and reflects the enhanced scale that JDA is expected to gain from the i2 acquisition as well as the strength of JDA's good market position, its stable free cash flow generation prospects and Moody's expectation that the company will maintain a good liquidity position.

The rating is constrained by the company's acquisition-led growth strategy, penchant for debt-financed acquisitions, relatively small size, the highly competitive and fragmented supply chain management software market, the near-term integration risk from the proposed i2 acquisition and risks associated with JDA's ability to reverse the underperformance at i2, Moody's said.

Pro forma leverage is approximately 2 times.

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