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S&P lowers CCC Information
S&P said it lowered the corporate credit rating on CCC Information Services Inc. to B- from B.
The outlook is stable.
The agency also said it lowered the ratings on the company's first-lien credit facilities to B from B+. The recovery rating remains at 2, indicating 70% to 90% expected default recovery.
S&P also said it lowered the issue-level rating on the $375 million second-lien term loan due 2025 to CCC from CCC+. The recovery rating remains at 6, indicating 0% to 10% expected default recovery.
The downgrades reflect the company's aggressive financial policy with pro forma trailing 12-month leverage of 10x at transaction close, S&P explained.
Despite an expectation of low- to mid-teens organic revenue growth and EBITDA margin expansion in 2017, the agency said it anticipates leverage to exceed 7.5x over the next 12 months.
The ratings also reflect the company's relatively narrow product focus within the highly competitive and mature U.S. auto claims software market and its tolerance for high debt leverage, S&P said.
Its No. 1 market position in the auto claims business and its high recurring revenue base offset these risks, the agency said.
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