S&P lowers Unisys, rates notes BB

Standard & Poor’s said it lowered its corporate credit rating on Unisys Corp. to B+ from BB-. The outlook is negative.

At the same time, S&P assigned a BB issue-level rating and 1 recovery rating to the company’s new $350 million of senior secured notes. S&P also raised the issue-level rating on the company’s existing senior unsecured notes to BB from BB- and revised the recovery rating on this debt to 1 from 4.

The 1 recovery rating indicates an expectation for very high (90%-100%) recovery in the event of payment default.

“Our downgrade of Unisys reflects our expectation that the company’s new debt issuance and restructuring expenses will preclude the firm from lowering its Standard & Poor's-adjusted leverage to less than 5x during the next 24 months, in spite of planned operating cost reductions,” said S&P credit analyst James Thomas in a news release.

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