Moody’s rates RP Crown notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to RP Crown Parent, LLC's proposed $400 million of senior notes.

Net proceeds, along with the net proceeds from $1,325,000,000 of new credit facilities and $580 million of new equity from funds managed by the Blackstone Group and the existing financial sponsor New Mountain Capital, will be used to refinance existing debt.

RP Crown's B2 corporate family rating and the B1 rating on its $1,325,000,000 of first-lien credit facilities are unchanged.

The outlook is stable.

RP Crown is the parent company of JDA Software Group, Inc.

Moody’s said the B2 corporate family rating reflects the company’s high leverage and the highly competitive Supply Chain Management (SCM) software market. The rating is supported by the company's large installed base of software maintenance revenues, its well-regarded products in its focus markets, and good operating scale.

The agency expects RP Crown's revenues to grow by about 3% to 4% over the next 12 to 18 months and it should produce free cash flow of about 8% of adjusted debt in 2017 driven by revenue growth, lower interest expense and declining restructuring costs.

Moody's expects RP Crown's leverage to decline from 6.8 times (Moody's adjusted) pro forma for the recapitalization to below 6 times by the end of 2017.

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