Moody's rates Rocket Software debt B1, Caa1

Moody's Investors Service said it revised Rocket Software, Inc.'s outlook to negative and affirmed its B2 corporate family rating and B2-PD probability of default.

The agency also rated the company's proposed first-lien senior secured bank credit facilities B1 and second-lien senior secured bank credit facility Caa1.

The proposed debt will be used to refinance existing debt and fund a $279 million equity distribution to the co-founders and private equity firm Court Square Capital Partners.

Moody's said the outlook change was driven by the large increase in debt as a result of the proposed equity distribution and limited flexibility within the B2 rating category, particularly given Rocket's acquisition appetite.

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