Moody's might downgrade BMC

Moody's Investors Service said it placed BMC Software, Inc.'s Baa2 issuer rating and the Baa2 rating assigned to its senior notes under review for downgrade.

The agency said the review was prompted by the company's announcement that it agreed to be acquired by private equity firms Bain Capital and Golden Gate Capital.

Given the change-of-control provisions in BMC's current debt, the debt will most likely be repaid at closing and all ratings withdrawn, Moody's said. To the extent existing bonds remain outstanding post-closing, however, the agency expects to downgrade them well below investment grade. The post-closing capital structure of the new company has not been determined, but Moody's expects it will probably include a substantially greater amount of debt than exists today.

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