S&P trims Alvaria

S&P said it lowered its ratings on Atlas Midco Inc. (Alvaria), and its first-lien term loan and revolving credit facility to CCC+ from B- and its second-lien term loan to CCC from CCC+.

“U.S.-based provider of contact center and workforce optimization software Atlas Midco Inc. (Alvaria) is experiencing significant cash burn in 2023 partly due to higher interest payments and a one-off premium on an interest rate cap. We now expect negative free operating cash flow (FOCF) of above $30 million in the year to reduce total liquidity (i.e. cash and revolving credit facility [RCF] availability) to $30 million-$35 million by year-end,” S&P said in a press release.

Additionally, the agency noted “The cash burn in 2023 also partly reflects cash costs related to restructuring activities to mitigate the impact of revenue declines on profitability and actions to improve the company's security posture and thus increase customer confidence following a cloud platform data breach in March. We expect these cash costs to decrease in 2024 as customer confidence returns, but we also note that the full extent of potential recurring revenue churn and lost sales opportunities from this incident are not yet known.”

The outlook is stable.

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