Research Update: Riverbed Parent Inc. Downgraded To 'CCC+', Outlook Negative On Continued Weak Operating Performance

U.S.-based network performance software solutions provider Riverbed Parent Inc.'s operating performance deteriorated through the second quarter of 2019 and its S&P-adjusted leverage increased steeply to more than 11.5x. We now view the prospect of Riverbed stabilizing its performance and materially deleveraging as diminishing and believe there exists a potential the company will pursue a distressed exchange given that its debt is trading at deeply distressed levels. We are lowering our issuer credit rating on Riverbed to 'CCC+' from 'B-', our issue-level rating on its first-lien credit facility to 'CCC+' from 'B-', and our issue-level rating on its senior unsecured notes to 'CCC-' from 'CCC'. Our recovery ratings remain unchanged. The negative outlook reflects the potential that we could lower our

...+ U.S.-based network performance software solutions provider Riverbed Parent Inc.'s operating performance deteriorated through the second quarter of 2019 and its S&P-adjusted leverage increased steeply to more than 11.5x. + We now view the prospect of Riverbed stabilizing its performance and materially deleveraging as diminishing and believe there exists a potential the company will pursue a distressed exchange given that its debt is trading at deeply distressed levels. + We are lowering our issuer credit rating on Riverbed to '###+' from 'B-', our issue-level rating on its first-lien credit facility to '###+' from 'B-', and our issue-level rating on its senior unsecured notes to '###-' from '###'. Our recovery ratings remain unchanged. + The negative outlook reflects the potential that we could lower our rating on Riverbed if its operating performance and credit metrics continue to deteriorate beyond our forecast or if its liquidity becomes impaired such that we envision a potential covenant...

Research Update