MUMBAI (Thomson Financial) - Moody's Investors Service said it has assigned
its 'B3' corporate family rating to payroll processing company Ceridian Corp,
related to the 5.3 bln usd takeover of the company by private equity firm Thomas
H Lee Partners LP and insurance provider Fidelity National Financial Inc.
The 'B3' rating is supported by the company's leading position within the US
long haul trucking payment processing market, good client diversity, predictable
recurring transaction based revenues and high switching costs of its installed
user base.
However, the rating is constrained by the company's high debt leverage,
competition from larger US payroll processors, its small scale in international
markets other than Canada, exposure to economic cyclicality in human resources
and transportation card servicing businesses and the challenge to consolidate
legacy payroll platforms, Moody's said.
Moody's has also assigned its 'B1' rating to Ceridian's 2.55 bln usd senior
secured credit facilities, and a 'Caa2' rating to its 1 bln usd senior unsecured
notes and 300 mln usd senior subordinated notes.
The rating outlook is stable and reflects Moody's expectation that the
company will achieve moderate EBITDA improvement over the next 12-18 months.
A loss of payroll revenue market share or decline in operating profitability
could put downward pressure on the ratings, Moody's said.
TFN.newsdesk@thomson.com
ypv/man
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