S&P cuts TriZetto loans to B-, CCC

Standard & Poor's said it lowered its corporate credit rating on TriZetto Group Inc. to B- from B.

The outlook is negative.

At the same time, the agency lowered its issue-level rating on the company's $650 million first-lien term loan due 2018 and $85 million revolving credit facility due 2016 to B- from B. The 3 recovery rating is unchanged and reflects an expectation for meaningful (50% to 70%) recovery in the event of payment default.

S&P also lowered its issue-level rating on the company's $150 million second-lien term loan due 2019 to CCC from CCC+. The 6 recovery rating is unchanged and reflects an expectation for negligible (0% to 10%) recovery in the event of payment default.

"The downgrade reflects credit metrics that have significantly weakened during the past year due to deteriorating operating performance," S&P credit analyst Andrew Chang said in a news release.

"Profits during the first half of 2013 have been lower than expected, leading to adjusted leverage (including adjustments for operating leases and preferred stock, which we view as debt) in the 12x area and negative free operating cash flow (FOCF) on a rolling 12-month basis ended June 2013. The negative outlook reflects our uncertainty about the company's ability to successfully address its operational issues and execute its strategy given ongoing management changes, as well as the severity of the impact of continued weak performance on liquidity during the next 12 months," Chang added in the release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.