S&P rates RealPage B-, loan B

S&P said it assigned a B- rating to RealPage Inc. and its B issue-level and 3 recovery ratings to the company’s planned $3 billion in first-lien credit facilities. The 2 recovery rating indicates substantial recovery (70%-90%; rounded estimate: 70%) in default.

The first-lien facilities will consist of a $2.75 billion term loan due 2028 and a $250 million revolver due 2026. Real Page also plans to secure an unrated $1 billion second-lien term loan due 2029.

Thoma Bravo is acquiring RealPage. “Aggressive financial sponsor policies and debt-funded acquisitions will likely result in the company sustaining adjusted leverage in the 14x area (high-8x area excluding preferred shares). Nevertheless, the company's solid market position in the large and growing real estate software and information services market will likely result in a solid improvement in credit measures,” S&P said in a press release.

The outlook is stable. The outlook reflects an expectation for high-single-digit percent organic revenue growth and expanding adjusted EBITDA margins, resulting in about 3x of deleveraging (excluding class A preferred share) and cash flow improvement over the next 12 months, the agency said.

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