S&P lowers Rocket Software, rates loans B+, B-

Standard & Poor's said it lowered the corporate credit rating on Rocket Software Inc. to B from B+.

The agency also said it assigned a B+ rating to the company's proposed $550 million senior secured first-lien term loan due 2020 and $25 million revolving credit facility due 2019.

The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P also said it assigned a B- rating to the company's proposed $175 million second-lien term loan due 2021. The 5 recovery rating indicates 10% to 30% expected default recovery.

The outlook is stable.

The agency said it will withdraw the ratings on Rocket's existing debt following the completion of the transaction.

The downgrade reflects a revision of Rocket's financial risk profile to highly leveraged from aggressive based on leverage that will increase to the low-6x range from 4x following the transaction, S&P said.

Partially offsetting Rocket's high recurring revenue and good profitability are its niche position in the market for infrastructure software and the presence of larger and better funded competitors, the agency said.

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