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Autodesk Inc. New Revolver And Term Loan Rated 'BBB'

SAN FRANCISCO (S&P Global Ratings) April 15, 2019--S&P Global Ratings today assigned its 'BBB' issue-level rating to San Rafael, Calif.-based design, engineering, and construction software provider Autodesk Inc.'s new revolving credit facility and term loan. The company used the proceeds of the term loan to fund the PlanGrid acquisition in December 2018. The 'BBB' rating is the same as our ratings on the company and on its existing unsecured debt, and reflects no meaningful contractual or structural subordination. The $650 million unsecured revolving credit facility expires on Dec. 17, 2023, and the $500 million term loan matures on Dec. 19, 2020.
Our 'BBB' corporate credit rating on Autodesk reflects its good market position, very high recurring revenue, and leverage that we expect to fall to less than 2x in 2020 as EBITDA exceeds pre-transition levels. Partly offsetting these factors is the exposure to cyclical construction and manufacturing end markets. We expect revenues to grow in the high-20% area in fiscal 2020 (ending in January) as the company continues its emergence from the trough of its transition to subscription pricing that it established in 2017 and 2018. We think EBITDA margins should reach the 30% area, up from the mid-teen percrentages in 2019, and that cash flow will reach the company's goal of $1.35 billion, as the company adds subscription customers rapidly and grows expenses slower than revenue.
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