S&P cuts Citrix

S&P said it downgraded Citrix Systems Inc. and its senior unsecured notes due 2027 to B from BBB and assigned a 3 recovery rating to the notes. The agency also removed the ratings from CreditWatch with negative implications, where they were placed on Feb. 1 and withdrew the BBB ratings on the company’s other unsecured issues because they were redeemed.

The downgrades follow Vista Equity Partners and Evergreen Coast Capital, affiliates of Vista Equity Partners Management LLC and Elliott Investment Management L.P., respectively, completing their previously announced acquisition of Citrix and its subsequent merger with Tibco Software Inc. on Sept. 29, S&P said.

“We now view Citrix as a core subsidiary of Picard Midco, thus we equalized our ratings on the companies. Following the transaction, Picard Midco Inc. is now the parent of both Tibco and Citrix. We view Citrix as a core subsidiary because it accounts for most of the group's consolidated revenue and is the borrower of the debt in the group's new capital structure. Therefore, we equalized our ratings on Citrix with our ratings on Picard Midco,” S&P said in a press release.

The outlook is stable mirroring the agency’s outlook on Citrix’s new parent, the agency said.

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