Fitch gives Software B+, loan BB-

Fitch Ratings said it gave Software AG a first-time expected long-term issuer default rating of B+ with a stable outlook. It also assigned expected BB-/RR3 ratings to its seven-year €1 billion senior secured term loan B.

Private equity firm Silver Lake will use the loan to help finance its purchase of Software. The deal is expected to close in October or November.

“The IDR and its stable outlook reflect Software AG's high leverage and execution risk on its profit improvement plan but are supported by its leading market positions, a high portion of recurring revenues and a good cash flow generation capacity. Leverage will be above levels that are commensurate with a B+ rating till June 2025 when we expect the company to deleverage to below 5x Fitch-defined EBITDA, from around 5.8x at the close of the acquisition,” Fitch said in a press release.

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