S&P cuts Rocket Software loan

Standard & Poor's said it lowered the rating on Rocket Software Inc.'s $105 million second-lien term loan due 2019 to B from B+ and revising the recovery rating to 5 from 4.

The 5 recovery rating indicates 10% to 30% expected recovery in a default.

The agency also affirmed the company's B+ corporate credit rating, along with the BB rating on its first-lien credit facilities comprising a $359 million term loan due 2018 and a $25 million revolving credit facility due 2017. The 1 recovery rating remains unchanged and indicates 90% to 100% expected recovery in a default.

The outlook is stable.

The ratings reflect the company's weak business risk profile marked by its niche position in the market for infrastructure software and the presence of larger and better funded competitors, S&P said.

The ratings also consider its aggressive financial profile with pro forma leverage in the high-4x range, the agency said, and an acquisitive growth strategy.

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