TCR_Public/171202.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Saturday, December 2, 2017, Vol. 21, No. 335

                            Headlines

AP GAMING: S&P Lowers Senior Secured Debt Rating to 'B'
CIBER INC: Incurs $2.57 Million Net Loss in September
KII LIQUIDATING: Gains $323,953 Net Income at September 30

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AP GAMING: S&P Lowers Senior Secured Debt Rating to 'B'
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S&P Global Ratings lowered its issue-level rating on Las
Vegas-based gaming equipment manufacturer AP Gaming Holdings LLC's
senior secured credit facility to 'B' from 'B+' following the
company's announcement that it intends to issue $65 million of
incremental term loan debt to fund an acquisition. S&P also revised
the recovery rating on this debt to '3' from '2'. The '3' recovery
reflects its forecast for meaningful (50%-70%; rounded estimate:
60%) recovery for lenders in a payment default. The additional
enterprise value from the proposed acquisition is insufficient to
offset the expected increase in secured debt at default as a result
of the proposed $65 million incremental term loan, resulting in
lower recovery prospects for secured lenders.

The company plans to use proceeds from the incremental term loan to
fund the acquisition of certain assets from another gaming
equipment supplier, to fund transaction fees and expenses, and to
add cash to the balance sheet.

S&P said, "Our 'B' corporate credit rating and negative outlook on
AP Gaming are unchanged by the planned acquisition and associated
debt raise because we expect the acquisition will be financed at a
multiple that is lower than our forecast for adjusted leverage in
2017 (low-6x area pro forma for a full year of acquired EBITDA).

"Additionally, the acquisition does not change our view of AP
Gaming's business risk because the acquired assets are within AP
Gaming's existing Class II markets. AP Gaming is planning on
acquiring around 1,700 Class II units from another gaming provider,
and plans to increase the yield on these units over time.

"Further, and notwithstanding our expectation for solid (high-30%
area) EBITDA growth in 2017, we continue to expect free operating
cash flow to be modestly negative in 2017 due to high levels of
capital expenditures related to growth initiatives. We believe
these growth investments will translate into greater cash flow
generation in 2018 given a full year benefit of these initiatives.
Although we expect AP Gaming will begin to generate positive free
cash flow in 2018, we believe an inability to internally fund cash
needs, resulting in a reliance on excess cash balances and
potential revolver availability, raises liquidity risk in a
scenario when EBITDA growth slows. We are unlikely to revise the
rating outlook to stable until we believe that AP Gaming's cash
flow base has increased to a level that will allow it to internally
fund capital expenditures and growth investments, such that it is
no longer reliant on excess cash and revolver availability to fund
fixed charges."

Operating performance through the nine months ended Sept. 30, 2017
has outperformed our prior forecast for the full year, due largely
to greater demand for AP Gaming's new cabinets, and from modestly
lower selling, general, and administrative (SG&A) expenses. S&P
said, "We now expect 2017 revenue and EBITDA growth in the low-20%
area and high-30% area respectively, compared to our prior forecast
for the low-double-digit area and mid-20% area, respectively. We
are forecasting 2018 revenue and EBITDA growth in the mid- to
high-single-digit percent area driven by continued demand for AP
Gaming's new products, supported by increased investments by
operators in slot floors given a favorable economic climate."

RECOVERY ANALYSIS

Key analytical factors

S&P said, "Our simulated default scenario contemplates a default in
2020 reflecting a significant decline in cash flow from the loss of
market share to either an existing incumbent operator or a new
competitor that offers better technology or more desirable games; a
significant and prolonged contraction in consumer spending; and/or
a significant slowdown in new market opportunities, coupled with
one of the other factors. We assume a reorganization following the
default, using an emergence EBITDA multiple of 5.5x to value the
company, and we assume the revolving credit facility is 85% drawn
at the time of default.

"We have raised our expectation for emergence EBITDA to $68 million
from $63 million, reflecting a modest increase in assumed EBITDA at
default from the planned acquisition."

Simulated default assumptions:

-- Emergence EBITDA: $68 million EBITDA multiple: 5.5x
-- Gross recovery value: $370 million
-- Net recovery value after administrative expenses (5%): $352
million
-- Obligor/nonobligor valuation split: 94%/6%
-- Value available for senior secured claims: $344 million
-- Total senior secured claims: $548 million
    --Recovery expectation: 50%-70% (rounded estimate: 60%)
Note: All debt amounts include six months of prepetition interest.

RATINGS LIST

  AP Gaming Holdings LLC
   Corporate Credit Rating        B/Negative/--

  Downgraded; Recovery Rating Revised

  AP Gaming Holdings LLC
                                  To         From
   Senior Secured                 B          B+
    Recovery Rating               3 (60%)    2 (70%)

AP Gaming is the legal borrowing entity funding the debt portion of
Apollo Global Management's acquisition of American Gaming Systems.
American Gaming Systems is a designer and manufacturer of gaming
systems.  American Gaming Systems entered into an agreement to be
acquired by an affiliate of Apollo Global Management on September
16, 2013.


CIBER INC: Incurs $2.57 Million Net Loss in September
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CIBER Inc., et. al., filed with the U.S. Securities and Exchange
Commission their monthly operating report for September 2017.

CIBER Inc. posted a net loss of $2.57 million on $nil of  revenue
in September.

As of September 30, 2017, CIBER Inc. posted $39.33 million in total
assets, $13.52 million in total liabilities, and $25.81 million in
total shareholders' equity.

The Debtors started the month with $43.23 million cash.  They
listed $8.25 million in total receipts and $4.78 million in total
disbursements.  Taking into consideration other accounts,
theDebtors had $38.22 million cash at September 30.

A copy of the monthly operating report is available for free at the
SEC at https://is.gd/HlRJtk  

                     About CIBER Inc.
    
CIBER, Inc. -- http://www.ciber.com/-- is a global information
technology consulting, services and outsourcing company.  CIBER,
Inc., and two other affiliates sought bankruptcy protection on
April 9, 2017 (Bankr. D. Del. Lead Case No. 17-10772).  Christian
Mezger, its chief financial officer, signed the petition.

The Debtors disclosed total assets of $334.2 million and total
liabilities of $171.9 million as of Sept. 30, 2016.

The Hon. Brendan Linehan Shannon presides over the case.

Morrison & Foerster LLP is the Debtors' lead bankruptcy counsel.
Polsinelli, PC, serves as co-counsel while Saul Ewing LLP serves as
local counsel.  The Debtors also hired Houlihan Lokey as investment
banker and financial advisor; Alvarez & Marsal North America, LLC,
as restructuring advisor; and Prime Clerk LLC as noticing and
claims agent.

An official committee of unsecured creditors has been appointed in
the Chapter 11 case.  The committee retained Perkins Coie, LLP, as
bankruptcy counsel; Shaw Fishman Glantz & Towbin LLC as co-counsel;
and BDO Consulting as financial advisor.

Since the closing of the Sale, the Debtors have taken steps to
change their corporate names from CIBER, Inc., to CMTSU
Liquidation, Inc., CIBER Consulting, Incorporated, to CMTSU
Liquidation 2, Inc., and CIBER International LLC, to CMTSU
Liquidation 3, LLC.



KII LIQUIDATING: Gains $323,953 Net Income at September 30
----------------------------------------------------------
KII Liquidating Inc. formerly known as Katy Industries, Inc., et
al., filed with the U.S. Securities and Exchange Commission their
monthly operating report for the period from August 27, 2017
through September 30, 2017.

The Debtors' consolidated statement of operations reflected a net
income of $323,953 on $nil of revenue for September.

At September 30, 2017, the Debtors had $7.51 million in total
assets, $21.45 million in total liabilities, and -$13.94 million in
total shareholders equity.

At August 27, 2017, the Debtors had a $3.85 million beginning cash
balance.  They listed total receipts of $105,480 and total
disbursements of $219,093.  Disbursements include $180,221 in
professional fees.  Thus, the Debtors had $3.74 million ending cash
balance at September 30.

A copy of the monthly operating report is available at the SEC at:

                    https://is.gd/yujmMv

                    About Katy Industries

Katy Industries, Inc. -- http://www.katyindustries.com/-- a
publicly traded Delaware corporation, and its wholly-owned direct
and indirect subsidiaries were organized as a Delaware corporation
in 1967.  The Company is a well-known manufacturer, importer, and
distributor of commercial cleaning and consumer storage products as
well as a contract manufacturer of structural foam products.  It
distributes its products across the United States and Canada.   It
is best known for such brands as Continental, Huskee, Color Guard,
Wilen, Muscle Mop, Contico, Tuffbin, and SilverWolf, among many
others.

The Company operates three manufacturing facilities located in
Jefferson City, Missouri, Tiffin, Ohio, and Fort Wayne, Indiana,
with its corporate headquarters located in St. Louis, Missouri.

Katy Industries, Inc., and its affiliates filed a voluntary
petition for relief under the Bankruptcy Code (Bankr. D. Del. Lead
Case No. 17-11101) on May 14, 2017.  Lawrence Perkins, its chief
restructuring officer, signed the petitions.

Katy Industries disclosed $821,321 in assets and $58,421,346 in
liabilities.

Stuart M. Brown, Esq., at DLA Piper LLP (US), represent the Debtors
as bankruptcy counsel.  The Debtors hired JND Corporate
Restructuring as their claims and noticing agent.

On July 31, 2017, the Office of the U.S. Trustee formed a committee
of retirees.  The Retirees' Committee hired Womble Carlyle
Sandridge & Rice, LLP as legal counsel.


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Troubled Company Reporter is a daily newsletter co-published
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