Fitch upgrades Forcepoint

Fitch Ratings said it raised the long-term issuer default ratings for Panther Guarantor II, LP, Panther Purchaser LP and Panther Commercial Holdings, LP (together Forcepoint) to B+ from B. The agency also upgraded Forcepoint's $75 million secured revolving credit facility and $680 million first-lien secured term loan to BB+/RR1 from B+/RR3. Panther Purchaser LP and Panther Commercial Holdings, LP are co-borrowers on the loans.

“Since the separation from Raytheon Technologies in January 2021, Forcepoint has executed on operational improvements that has reversed the historically negative FCF to positive FCF as of 3Q 2021 and forecasted 2022. Fitch expects pre-dividend FCF margins to be maintained in the low-teens through the rating horizon consistent with industry peers,” the agency said in a press release.

Fitch also said it forecasts Forcepoint's gross leverage to be in the 4x-5x range in 2022, down from 5.7x in 2021 lowered by EBITDA growth despite the incremental debt incurred for acquisitions.

The outlook is stable.

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