S&P rates Epicor loan B+

Standard & Poor's said it assigned a B+ corporate credit rating to Epicor Software Corp. and a B+ rating with a recovery rating of 3 to Epicor's proposed $175 million senior secured bank facility, which will consist of a $75 million revolving credit facility due 2009 and a $100 million term loan due 2012. The outlook is positive.

Proceeds from this facility will be used to refinance existing debt and to add to liquidity. Existing debt was used primarily to fund the recent $121 million acquisition of CRS Retail Technology Group Inc., which bolstered Epicor's presence in the rapidly growing specialty retail vertical, the agency said.

The ratings reflect Epicor's second-tier presence in a highly competitive and consolidating industry, rapid growth and limited track record operating at current revenue levels, S&P said. These are only partially offset by a solid presence within its mid-market niche, a largely recurring revenue base across a broad customer base and moderate debt leverage for the rating.

Following the CRS Retail acquisition, pro forma operating lease-adjusted total debt to EBITDA was about 3x as of December.

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