Research Update: Ceridian HCM Holding Inc. Upgraded To 'B+' From 'B' On Improved Credit Measures And Reduced Financial Sponsor Ownership

Minneapolis-based human capital management (HCM) services provider Ceridian HCM Holding Inc.'s strong recurring cloud revenue growth should support deleveraging over the next 12 months. At the same time, the steady exit of the company's financial sponsors should improve governance and support Ceridian's pursuit of more conservative financial policies as a public company. We believe improving underlying cash flows should allow the company to reinvest in product and new markets growth while allowing it to sustain S&P Global Ratings' adjusted debt-to-EBITDA in the mid-4x area in 2020, and improve thereafter. Therefore, on Feb. 10, 2020, S&P Global Ratings raised its long-term issuer credit rating on Ceridian to 'B+' from 'B'. At the same time, S&P Global Ratings raised its issue-level rating

...- Minneapolis-based human capital management (HCM) services provider Ceridian HCM Holding Inc.'s strong recurring cloud revenue growth should support deleveraging over the next 12 months. At the same time, the steady exit of the company's financial sponsors should improve governance and support Ceridian's pursuit of more conservative financial policies as a public company. - We believe improving underlying cash flows should allow the company to reinvest in product and new markets growth while allowing it to sustain S&P Global Ratings' adjusted debt-to-EBITDA in the mid-4x area in 2020, and improve thereafter. - Therefore, on Feb. 10, 2020, S&P Global Ratings raised its long-term issuer credit rating on Ceridian to 'B+' from 'B'. At the same time, S&P Global Ratings raised its issue-level rating on the company's senior secured bank debt to 'B+' from 'B'. The recovery rating on the debt is unchanged at '3'. - The stable outlook reflects our view that Ceridian will expand its cloud-based SaaS...

Research Update