Moody's may cut UGS

Moody's Investors Service said it placed the subordinated debt ratings of UGS Corp. on review for possible downgrade and affirmed the company's other ratings following the announcement of UGS' intention to acquire Tecnomatix Technologies.

On review are UGS' B3 rated $550 million senior subordinated notes and B2 senior unsecured issuer rating.

Moody's affirmed UGS' B1 senior implied rating, B1 rated $125 million senior secured revolving credit facility and $500 million senior secured term loan and SGL-3 speculative grade liquidity rating.

Moody's said the review for possible downgrade of the subordinated notes reflect the potential for that rating to decline if UGS uses debt to finance the $228 million price, representing a multiple of about 20 times Tecnomatix' estimated trailing twelve month EBITDA.

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