S&P rates Rocket Software notes CCC+

S&P said it assigned Rocket Software Inc.’s planned offering of $500 million of senior unsecured notes a CCC+ rating with a 6 recovery rating.

Rocket will use the proceeds to repay its second-lien term loan and fund the acquisition of Uniface. S&P will withdraw the second-lien rating once the loan is repaid.

The agency also upgraded its ratings for Rocket and its first-lien revolver and term loan to B from B-. The loans’ 3 recovery rating is unchanged.

“While its starting leverage will be in the low-7x area following the Uniface acquisition, we anticipate Rocket's ability to improve its EBITDA margins will help it decrease its leverage in 2021. Even though the company's EBITDA margins have been relatively high compared with those of other technology software companies, it has continued to focus on optimizing its cost structure,” S&P said in a press release.

The outlook is stable.

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