Moody's rates Shield Finance debt B2, affirms Sophos

Moody's Investors Service said it affirmed the B2 corporate family rating and B3 probability of default rating of Shield Holdco Ltd., the parent company of Sophos Ltd.

Moody's also assigned a provisional B2 rating to the senior secured bank debt proposed to be issued by Shield Finance Co. Sarl, namely a $20 million revolving credit facility due 2017, a €75 million term loan A due 2018 and a $320 million term loan B due 2019.

The outlook is stable.

Moody's said that despite its small size compared to larger competitors including Symantec and McAfee and relatively limited product line diversification, Sophos is positioned as one of the leading software providers for SMEs.

Sophos' business profile also benefits from positive industry trends, a large and diversified customer base and high customer retention rates.

The rating remains constrained by the intense competition and consolidation trend in the sector, which highlights the likelihood of debt-financed M&A activity in the future as well as potential integration issues, Moody's said.

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