TEXT-S&P: Nuance Communication '4' recovery rtg remains unchanged

Mon Oct 15, 2012 10:06am EDT

Oct 15 - Standard & Poor's Ratings Services said today that is has affirmed
its 'BB-' issue-level rating on Nuance Communication's $350 million
add-on senior unsecured notes due 2020. The '4' recovery rating on the company's
senior unsecured notes remains unchanged.     

The '4' recovery rating indicates expectations for average (30%-50%) recovery 
in the event of a payment default. The company intends to use the proceeds 
from the $350 million senior unsecured notes to repay approximately $144 
million of senior secured first-lien term loan due 2013 and for general 
corporate purposes. The remaining first-lien term loan outstanding is $493 
million and is due 2016.

The 'BB+' rating on the company's first-lien credit facilities and the '1' 
recovery rating on that debt remain unchanged, reflecting our expectation for 
very high (90%-100%) recovery in the event of a payment default.

Our 'BB-' corporate credit rating and stable outlook on Nuance Communications 
also remain unchanged. Standard & Poor's continues to view Nuance 
Communications' financial risk profile as "significant," highlighted by its 
acquisitions growth strategy. Pro forma for the proposed $350 million senior 
unsecured note issuance, operating lease-adjusted total debt to EBITDA will be 
in the low-5x at close, high for a "significant" financial risk profile and 
primarily a result of deferred revenue recognition from recent acquisitions 
not allowed according to GAAP. We expect leverage to decline to 4x or below 
over the next year, as deferred revenue from recent acquisitions is 
recognized, and as Nuance Communications generates revenue and EBITDA growth 
organically and through contributions from potential future acquisitions.

Nuance Communications is a provider of voice and language solutions for 
businesses and consumers globally. (For the complete corporate credit rating 
rationale, see the research update on Nuance, published Aug. 27, 2012, on 
RatingsDirect.)

RELATED CRITERIA AND RESEARCH
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     -- Top 10 Investor Questions: How Will The Global Technology Industry 
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     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
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High Technology Industry, Oct. 15, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

RATINGS LIST

Nuance Communications Inc.
 Corporate Credit Rating                       BB-/Stable/--

Issue Rating Unchanged

Nuance Communications Inc.
 Senior Unsecured
  $1.050 bil. nts due 2020                     BB-
   Recovery Rating                             4


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.