Research Update: Riverbed Parent Inc. Downgraded To 'CCC' On Continuing Revenue Declines And Looming Debt Maturities, Outlook Negative

U.S.-based network performance software solutions provider Riverbed Parent Inc.'s recently reported third-quarter results demonstrated continuing revenue declines with some progress toward improving its margins. We believe that the difficult macroeconomic environment will likely to compound the effects of the secular demand pressures Riverbed is already facing, which--alongside its looming debt maturities--increases the risk of a distressed debt exchange over the next 12 months. Therefore, we are lowering our issuer credit rating on Riverbed to 'CCC' from 'CCC+'. At the same time, we are lowering our issue-level rating on the company's first-lien credit facility to 'CCC' from 'CCC+' and our issue-level rating on its senior unsecured notes to 'CC' from 'CCC-'. Our recovery ratings remain unchanged at '3'. The negative outlook

...- U.S.-based network performance software solutions provider Riverbed Parent Inc.'s recently reported third-quarter results demonstrated continuing revenue declines with some progress toward improving its margins. - We believe that the difficult macroeconomic environment will likely to compound the effects of the secular demand pressures Riverbed is already facing, which--alongside its looming debt maturities--increases the risk of a distressed debt exchange over the next 12 months. - Therefore, we are lowering our issuer credit rating on Riverbed to '###' from '###+'. - At the same time, we are lowering our issue-level rating on the company's first-lien credit facility to '###' from '###+' and our issue-level rating on its senior unsecured notes to '##' from '###-'. Our recovery ratings remain unchanged at '3'. - The negative outlook on Riverbed reflects that we could lower our ratings if its operating performance continues to deteriorate such that we perceive an even greater risk of a...

Research Update