Moody’s lowers MSC Software

Moody’s Investors Service said it downgraded MSC Software Corp.’s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

Moody’s also said it downgraded the second-lien term loan to Caa2 from Caa1 and affirmed the B1 ratings on the first-lien term loan.

The outlook is stable.

The downgrades reflect the declining revenue and EBITDA since the 2014 dividend recapitalization and the resulting increase in financial leverage to about 8x, the agency said.

The ratings also consider the company’s high financial leverage resulting from the May 2014 dividend recapitalization transaction, as well as revenue and EBITDA declines over the last year, Moody’s said.

The ratings also take into account the company’s strong niche position in the simulation and analysis software industry, the agency added.

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