Roaring Fork Intermediate LLC Assigned #B-# Outlook $265M First-Lien Debt Rated #B-# (Recovery: 3)

Stocks and Financial Services Press Releases Wednesday January 10, 2018 09:05
NEW YORK--10 Jan--S&P Global Ratings
  • We are assigning our 'B-' corporate credit rating to Roaring Fork Intermediate LLC, doing business as Ping Identity Corp., an identity and access management (IAM) software company.
  • We are also assigning our 'B-' issue level rating to Ping's proposed senior secured first-lien facility, consisting of its $25 million revolver and $240 million first-lien secured term loan.
  • The proceeds from the $240 million term loan will be used to repay the company's existing $170 million debt as well as increase the company's cash on hand.
  • The stable outlook on Ping reflects our expectation that the company's growing revenue base will improve profitability due to operating efficiencies and will lead to deleveraging to the S&P-adjusted mid-11x area over the coming year while generating positive free operating cash flow (FOCF) and maintaining adequate liquidity.

NEW YORK (S&P Global Ratings) Jan. 9, 2018--S&P Global Ratings today assigned its 'B-' corporate credit rating to Denver-based Roaring Fork Intermediate LLC, doing business as Ping Identity Corp. The outlook is stable.

At the same time, we assigned our 'B-' issue level rating and '3' recovery rating to Ping's proposed first-lien senior secured facility, consisting of its $25 million revolver due 2023 and $240 million term loan due 2025. The '3' recovery rating indicates our expectation for meaningful (50% to 70%; rounded estimate: 50%) recovery in the event of a payment default.

The rating on Ping reflects its high debt leverage, its limited operating scale in the highly fragmented IAM market, and competitive pressure from larger companies in the market with significant financial resources. These risks are mitigated by the company operating in a growing IAM market, high recurring revenue providing revenue visibility, and low customer concentration risk.

The stable outlook reflects our view that Ping's growing revenue base will improve profitability due to operating efficiencies and will lead to deleveraging to the mid-11x area over the next 12 months while generating positive FOCF and maintaining adequate liquidity.

We could downgrade the company if it experiences an unexpected decrease in sales due to product inferiority or irrelevance that would cause subscription cancellations, negative FOCF, and weak liquidity. We could also lower the rating in the event of any significant debt-funded acquisitions or dividends.

We could raise the rating if the company can continue its growth path and improve its profitability such that leverage improves to and stays below 7.5x. This could be the result of expanded product offerings that could be sold to existing and new clients in addition to contractual price increases.


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