S&P drops Reynolds & Reynolds to junk, gives loans BB-, B, B-

Standard & Poor's said it lowered its ratings on Reynolds & Reynolds Co., including its corporate credit rating to B+ from BBB.

In addition, S&P said it removed the ratings from CreditWatch with negative implications where they were placed Aug. 9.

The outlook is positive.

At the same time, the agency said it assigned its bank loan and recovery ratings to the company's proposed $2.485 billion secured first-, second- and third-lien bank loan financing.

The first-lien facilities consist of a six-year $75 million revolving credit facility and a six-year $1.485 billion term loan and S&P said they are rated BB- with a recovery rating of 1.

The second-lien facility consists of a seven-year $520 million term loan and is assigned a B rating with a recovery rating of 3, the agency added, noting that the third-lien facility consists of a 7.5-year $405 million term loan and is assigned a B- rating with a recovery rating of 5.

S&P added that the ratings on Reynolds & Reynolds reflect its highly leveraged financial profile following the acquisition as pro forma total debt to EBITDA will approach 7 times at closing.

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