S&P rates Unisys notes BB-

S&P said it assigned a BB- rating and 1 recovery rating to Unisys Corp.'s new $425 million senior secured notes.

The 1 recovery rating indicates 90% to 100% expected default recovery.

S&P also said it lowered the rating on the company's unsecured convertible notes to B- from B and revised the recovery rating to 5 from 4.

The 5 recovery rating indicates 10% to 30% expected default recovery.

The company's B corporate credit rating and negative outlook are unchanged.

The ratings reflect the company's persistent revenue declines, weak margins in its core services business and leverage in excess of 6x, S&P said.

The negative outlook is founded on an expectation that sizable mandatory pension contributions and restructuring expenses will constrain the company's ability to generate free cash flow over the next 12- to 24-months in spite of recent improvements to EBITDA margins and a moderating pace of revenue decline, the agency said.

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