Moody's upgrades Sophos

Moody's Investors Service said it upgraded Sophos Holdings, LLC’s guaranteed senior secured first-lien term loan and the guaranteed senior secured first-lien revolving credit facility to B2 from B3. Concurrently, the agency raised Sophos Intermediate II Ltd.'s corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD.

"Today's rating action reflects the strengthening in Sophos' operating performance over the past year leading to a substantial reduction in leverage and a step-up in free cash flow generation,” said Luigi Bucci, Moody's lead analyst for Sophos, in a press release.

"That said, a continued improvement in credit metrics over the next 12-18 months might be challenged by the weakening macro-economic environment, particularly because of the company's exposure to the small and medium sized businesses, together with the ongoing wage inflation and the increase in sales and marketing costs" added Bucci.

The outlook is stable.

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