S&P lowers Avaya outlook to negative

Standard & Poor's said it revised its outlook on Avaya Inc. to negative from stable, reflecting recently weaker business conditions, lower profitability and rising leverage.

The B corporate credit rating and senior bank loan ratings remains unchanged, as does the B- rating on the company's unsecured notes, as well as the 3 recovery rating on the bank loan, indicating meaningful expectation of recovery and 5 recovery rating on the unsecured notes, indicating modest expectation of recovery, the agency added.

S&P noted that the ratings on Avaya reflect its leveraged balance sheet and significant competitive pressures, which more than offset its solid position in the enterprise voice communications industry and a good base of recurring maintenance revenues.

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