...November 15, 2023 NEW YORK (S&P Global Ratings) Nov. 15, 2023--S&P Global Ratings said today enterprise-focused software provider Cloud Software Group Inc.'s (B/Stable/--) proposed fungible add-on to its first-lien term loan B maturing in March 2029 does not negatively affect leverage. The company intends to use the proceeds to redeem--at a premium--a portion of its holdco preferred shares that we treat as debt. The 'B' issue-level rating and '3' recovery rating on the term loan are not affected. Our issuer credit rating is unchanged. We view the transaction as largely leverage-neutral and estimate adjusted debt to EBITDA at about 9.8x on a pro forma basis. We expect leverage improvement to about 8.8x by the end of fiscal 2023 and 7.8x in fiscal 2024. While total secured debt increases, the company may benefit from the potential cash flow savings over time from lower cash interest expense on the term loan B compared with the preferred shares' high dividend rate currently paid in cash. In...
