S&P rates Rocket Software loans B+, B-

S&P said it affirmed its B corporate credit rating on Rocket Software Inc.

The outlook is stable.

At the same time, the agency assigned its B+ issue-level rating to the company's proposed $630 million senior secured first-lien term loan and $35 million revolving credit facility. The 2 recovery rating indicates an expectation of substantial (70%-90%; lower half of the range) recovery in the event of a payment default.

S&P also assigned its B- issue-level rating to the company's proposed $215 million senior secured second-lien term loan. The 5 recovery rating indicates an expectation for modest (10%-30%; lower half of the range) recovery of principal in the event of a payment default.

"The ratings reflect our view of the company's small position in the overall software services market, focus on the declining mainframe end market, and high reliance on its relationship with a large original equipment manufacturer (OEM), but also its high profit margins, high percentage of recurring revenue, and high customer retention rates," S&P credit analyst Minesh Shilotri said in a news release.

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