SS&C Technologies Inc.'s Secured Debt Rating Raised To 'BB+' On Unsecured Note Upsizing, Recovery Rating Revised To '2'

SAN FRANCISCO (S&P Global Ratings) March 15, 2019--S&P Global Ratings today 
revised its recovery rating on Windsor, Conn.-based SS&C Technologies Inc.'s 
term loan B (TLB) tranche and SS&C European Holdings S.A.R.L.'s TLB-4 to '2' 
from '3'. The '2' recovery rating indicates our expectation for substantial 
(70%-90%; rounded estimate: 70%) recovery in the event of a default. At the 
same time, we raised our issue-level ratings on the TLBs to 'BB+' from 'BB' in 
accordance with our notching criteria for a '2' recovery rating. All of our 
other ratings on SS&C remain unchanged.

We expect that the company will use the proceeds from the $1.25 billion 
upsize, along with the previously announced $750 million note issuance, to 
repay a portion of its existing TLB-3 (expected balances at close: B1-$515 
million, B3-$2.31 billion, B5-$1.86 billion, and SS&C European Holdings 
S.A.R.L.'s B4-$1.63 billion). The reduction in SS&C's TLB tranche balance 
following the transaction improves the recovery prospects for the secured debt 
to over 70%, which led us to revise our recovery ratings and raise our 
issue-level ratings on the debt.

ISSUE RATINGS--RECOVERY ANALYSIS

Key analytical factors
  • Our simulated default scenario contemplates a default occurring in 2024 due to fund consolidations or divestitures that reflect weak financial conditions and a prolonged depressed trading environment.
  • We value the company on a going-concern basis using a 7.5x enterprise value multiple of our projected emergence EBITDA.
Simulated default assumptions
  • Year of default: 2024
  • EBITDA at emergence: $637 million
  • EBITDA multiple: 7.5x
  • LIBOR at default: 2.5%
Simplified waterfall
  • Net enterprise value (after 5% administrative costs): $4.5 billion
  • Valuation split (obligors/nonobligors): 75%/25%
  • Collateral value available to first-lien debt: $4.5 billion
  • First-lien debt claims: $6.2 billion
  • --Recovery expectations: 70%-90% (rounded estimate: 70%)
  • Collateral value available to unsecured debt: $0
  • Unsecured debt claims/deficiency claims: $2.1 billion/$1.6 billion
  • --Recovery expectations: 0%-10% (rounded estimate: 0%)